Context
The CFRF has been running since March 2019 and is chaired jointly by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), reflecting the importance of climate change to their respective strategic objectives. The FCA has announced that the Forum has published its second set of guides to help the financial industry effectively manage climate-related financial risks.
Key points to note
- The guides focus on risk management, scenario analysis, disclosure, innovation and climate data and metrics, and will help firms respond effectively to climate-related financial risks.
- The five CFRF working groups below have collectively publishing a total of 10 deliverables, two of which are summarised below as they are likely to be of interest to our client firms:
- Risk Management
- Scenario Analysis: the Scenario Analysis Working Group (SAWG) has produced practical examples on how firms can incorporate sector specific points when developing an effective approach to scenario analysis. The SAWG will publish a publicly available online scenario analysis tool in Q1 2022, which is designed for use by smaller firms who may not have the experience or resources to attempt independently.
- Disclosure: the Disclosure Working Group (DWG) has collated several case studies on disclosure from a variety of organisations that will be of interest to firms as they develop their approach to climate-related disclosures. The DWG have also produced guidance highlighting the legal risks associated with publishing a climate-related disclosure and how these risks can be effectively managed.
- Innovation
- Climate Data and Metrics
- A total of 10 different outputs have been published by the various working groups, and the more relevant perhaps include:
Next actions
None – for information and awareness