Climate and environmental risk in banking risk management

Climate change and climate-related risks are influencing banking strategies, and it is sure that the future policy will be affected by the need of a more sustainable finance. Starting from the emerging trends on climate-related disclosures the book aims at outlining the importance of climate risk analysis and the real awareness of the impact of the effects of climate change in banking risk management. Climate and environmental risks affect all banking risks, both financial and non-financial and the relevance of the impact is important for banking stability. In fact, on the part of banking supervisors, there is increasing attention to the issue of climate risks as they can affect the capital allocation of financial intermediaries and the stability of the financial system. Banking risk management should be reshaped to face this new challenge, within the risk framework. A common element of climate risk assessments, regardless of the type of business model of the financial intermediary, is the performance of forward-looking analyses, which require the development and adoption of assessment models with climate scenarios representative of future strategies. The book analyses the impact on risk governance processes and on decision-making processes for business management and governance of the different implications of climate risk management.