Global Credit Data (GCD) and the United Nations Environment Programme Finance Initiative (UNEP FI) have recently embarked on an important partnership aimed at enhancing ESG and climate risk efforts. This collaboration focuses on advancing the methodologies and benchmarks used by financial institutions to assess and manage climate risks.

Climate Risk Benchmarking Results!

UNEP FI and GCD recently completed a global survey assessing how banks are integrating climate risks into their credit risk frameworks. Covering methodologies, data sources, and scenario analysis across sectors, the results provide a snapshot of evolving practices and challenges.

Results have been shared with participating institutions. A public version of the report and a webinar in June will highlight key insights and practical takeaways.

For more information, contact GCD Climate Risk climaterisk@globalcreditdata.org

Objectives of the project:

The collaboration will identify common credit risk assessment methodologies, provide a benchmark for modeling approaches for climate risk assessment used by financial institutions, and explore how the quantification of climate risks can be impacted by variations in assessment methodologies.

Value for Participants:

GCD and UNEP FI will publish a comprehensive report that benchmarks and compares the various credit risk modelling approaches used by financial institutions to assess climate risks.

This report will include overview of methodologies, information on data used, scenarios and models applied, variables and metrics selected, methodological comparisons, best practices, and the standardization of climate risk modeling practices across the financial sector. It will also provide insights into the progress financial institutions have made in their climate risk assessment approaches.

Key Sections of the Survey:

Climate-Related Credit Risk Assessment and Integration
Transition & Physical Risk specific focus
Collateral Value Adjustments
Sector-Specific focus
Scenario Analysis
ESG Scores
Data & IT
Quantitative Impact on Metrics like ECL, RWA, and ECAP