Climate Risk Management for Banks Training Course

Participants can interpret climate hazard information relevant to banking risk decisions.

• Climate hazards interpreted using hazard, exposure and vulnerability concepts
• Representative Concentration Pathways and Shared Socioeconomic Pathways compared
• Temperature pathways linked to rainfall, heat, drought and sea-level hazards
• Return periods and exceedance probabilities used for extreme-event interpretation
• Spatial resolution limitations documented before location-based risk conclusions
• Climate data uncertainty separated from model, scenario and data uncertainty

Participants can identify the principal supervisory and disclosure requirements for climate risk management.

• Basel climate-risk principles mapped to governance, strategy and risk management
• NGFS guidance applied to climate scenario design and supervisory dialogue
• TCFD recommendations structured around governance, strategy, risk and metrics
• IFRS S2 requirements connected to material climate-related financial disclosures
• ICAAP climate risk integration aligned with capital planning evidence
• Supervisory findings translated into practical remediation actions and ownership

Participants can design governance structures with clear climate risk accountability and challenge.

• Board responsibilities defined through climate risk mandates and reporting calendars
• Risk committee terms of reference include climate risk challenge duties
• First-line accountabilities assigned across lending, treasury and business units
• Second-line challenge covers methodology, limits, aggregation and reporting
• Internal audit assurance plans test climate risk control design
• Climate risk policies linked to delegated authorities and escalation routes

Participants can build a climate risk taxonomy and prioritise material bank exposures.

• Climate risk taxonomy aligned with existing enterprise risk categories
• Materiality assessment scores exposure, vulnerability, time horizon and controls
• Risk event statements specify drivers, affected assets and financial consequences
• Inherent and residual climate risk ratings documented within risk registers
• Risk ownership assigned using RACI matrices and control accountability
• Materiality thresholds calibrated against portfolio size and capital relevance

Participants can specify data requirements, lineage and quality controls for climate risk analysis.

• Counterparty identifiers linked across credit, collateral and transaction systems
• Sector classification mapped using NACE, NAICS and internal codes
• Geocoding standards applied to assets, collateral and operating locations
• Emissions data assessed for source, scope, coverage and assurance
• Data lineage documents sources, transformations, owners and refresh frequencies
• Quality controls test completeness, accuracy, timeliness and representativeness

Participants can assess physical climate exposures at borrower, collateral and portfolio level.

• Hazard maps matched to borrower sites and collateral coordinates
• Flood, wildfire, heat and drought exposures screened by location
• Vulnerability indicators capture construction quality, insurance and business continuity
• Collateral valuation effects estimated from damage, repair and marketability assumptions
• Business interruption channels linked to revenue, costs and debt service
• Physical risk heat maps aggregate exposure by geography and asset class

Participants can evaluate borrower transition risk using sector pathways and financial evidence.

• Sector decarbonisation pathways compared with borrower emissions trajectories
• Carbon price assumptions translated into operating cost and margin effects
• Capital expenditure plans tested against technology substitution requirements
• Customer demand shifts assessed through revenue concentration and contract terms
• Management transition plans reviewed for governance, targets and financing
• Transition risk ratings supported by documented assumptions and evidence

Participants can incorporate climate risk evidence into credit assessment and approval processes.

• Climate due diligence questions embedded within borrower onboarding processes
• Cash-flow forecasts adjusted for hazard disruption and transition costs
• Probability of default drivers linked to climate-sensitive financial ratios
• Loss given default assumptions reflect collateral damage and liquidity
• Loan covenants address insurance, data reporting and transition commitments
• Credit memoranda present climate risk conclusions, mitigants and approval conditions

Participants can identify climate-related concentration risks and prioritise portfolio actions.

• Exposure segmentation combines sector, geography, tenor and collateral type
• Weighted-average carbon intensity interpreted alongside financed-emissions limitations
• Climate vulnerability scores aggregated using exposure-weighted portfolio methods
• Concentration measures identify correlated hazard and transition risk clusters
• Top-down screening distinguishes prioritisation tools from borrower-level assessment
• Portfolio heat maps support monitoring triggers and management reporting

Participants can construct climate scenarios that produce usable financial risk insights.

• NGFS orderly, disorderly and hot-house scenarios compared for banking use
• Scenario narratives translated into macroeconomic and sector-specific variables
• Time horizons distinguish short-term planning from long-term structural change
• Assumptions documented for carbon prices, energy demand and hazard frequency
• Sensitivity analysis tests material drivers and alternative parameter choices
• Scenario limitations communicated without overstating forecast precision

Participants can structure climate stress tests and connect results to capital planning.

• Stress-testing objectives defined for risk management, ICAAP and supervision
• Satellite models link climate variables to default and loss parameters
• Bottom-up borrower shocks reconciled with top-down portfolio estimates
• Credit migration matrices adjusted for sector and scenario effects
• Capital impacts calculated through expected loss, provisions and risk-weighted assets
• Management actions assessed for feasibility, timing and second-round effects

Participants can identify climate risk transmission into non-credit bank risk categories.

• Market risk channels include repricing, spreads, volatility and stranded assets
• Liquidity stress considers deposit behaviour, funding access and collateral haircuts
• Climate events tested against business continuity and operational resilience plans
• Third-party dependencies assessed for weather disruption and transition exposure
• Insurance availability monitored as a driver of collateral protection
• Treasury dashboards incorporate climate-sensitive funding and market indicators

Participants can set climate risk appetite measures and monitoring arrangements.

• Risk appetite statements express climate exposures within approved tolerance boundaries
• Key risk indicators combine forward-looking signals with portfolio exposure measures
• Sector limits calibrated using risk materiality, strategy and concentration analysis
• Early-warning indicators identify deteriorating borrower resilience and insurance gaps
• Threshold breaches trigger escalation, review and documented management decisions
• Dashboard design separates board metrics from management operating indicators

Participants can prepare decision-useful climate risk reporting for boards and external users.

• Board papers connect climate findings to capital, earnings and strategic choices
• TCFD-aligned reporting presents governance, strategy, risk management and metrics
• IFRS S2 disclosures identify material climate-related risks and opportunities
• Metrics definitions document calculation methods, boundaries and data limitations
• Scenario analysis results presented with assumptions, uncertainty and management actions
• Disclosure controls assign review, approval and evidence-retention responsibilities

Participants can plan a phased climate risk management implementation programme.

• Current-state assessments identify policy, data, model and capability gaps
• Target operating models define processes, ownership and decision rights
• Implementation roadmaps sequence quick wins, dependencies and control milestones
• Model governance plans address validation, documentation and periodic review
• Training plans specify role-based climate risk capability requirements
• Progress reporting tracks deliverables, risks, decisions and overdue actions

Participants can build, review and present a complete climate risk management pack for a bank portfolio.

• Portfolio scope defined using exposures, sectors, geographies and materiality thresholds
• Climate risk taxonomy applied to prioritised credit and collateral exposures
• Physical and transition heat maps produced from supplied portfolio data
• NGFS scenario impacts translated into credit, capital and management actions
• Risk appetite indicators, limits and escalation procedures documented clearly
• Board pack prepared with governance findings, uncertainties and recommended decisions