Scenario analysis is widely recognized as one of the most important tools for understanding the impacts of climate change on your organization. It can also help prompt longer term strategic thinking about risks and opportunities. Despite this, GARP’s second annual Global Survey of Climate Risk Management found scenario analysis to be among the least mature elements of climate financial risk management across firms. It is clear that a significant gap exists between the need for climate scenario analysis and the capabilities to fully utilize this tool.
To help bridge this gap, UNEP FI has been working with 39 banks as part of a climate risk and disclosure program. Through David Carlin’s presentation, you will gain practical insights into the selection and deployment of climate scenarios at firms. David will also reflect on some of the limitations of the current approach and the role of climate scenario analysis when deployed by regulators for the purpose of stress testing.
The second part of this presentation will include a look ahead to the continuing work by the modeling teams and the NGFS, and how these developments will seek to address the limitations found in the current scenarios. David will also present practical next steps for firms looking to go further in their climate scenario analysis.
This session will conclude with 10-15 minutes of audience Q&A.
Through this webcast you will gain an understanding of:
- The structure of the latest climate scenarios
- How these scenarios are being used in the financial sector
- The future of scenario development and risk analysis
David Carlin leads the Taskforce on Climate-related Financial Disclosures program for UNEP-FI. In that role, he helps a group of nearly 40 global financial institutions to understand and assess their climate risk. He also writes about climate change and history for Forbes. Prior to joining UNEP-FI, Carlin worked as a senior manager in risk and public policy for Oliver Wyman Consulting. Before joining Oliver Wyman, he was a model validator at PNC bank, specializing in CCAR and Basel credit models. Carlin’s background is in quantitative modeling and decision science. He conducted research in financial decision-making at Carnegie Mellon University and graduated Phi Beta Kappa from Williams College.
Jo Paisley is Co-President of the GARP Risk Institute (GRI), the thought leadership of GARP. Set up in early 2018, the Institute works across all risk disciplines, with Jo’s focus to date on climate risk management and scenario analysis, stress testing and operational resilience. Her career began at the Bank of England where she worked in a variety of roles, across macroeconomics, statistics, supervision and risk. Her last role was as a Director of the Supervisory Risk Specialists Division within the Prudential Regulation Authority, where she was heavily involved in the design and execution of the UK’s first concurrent stress test in 2014. She left the Bank in 2015 and joined HSBC as their Global Head of Stress Testing. She has also worked as an independent stress testing consultant, advising firms on how to get the most value out of stress testing.
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