Podcast: Climate Risk Scenarios – A Method to Assess and Manage Plausible Risks and Opportunities for the Financial Sector

Year Published

2021

Contributing Organizations

International Monetary Fund (IMF)

Global Affairs Canada (GAC)

The Swedish International Development Cooperation Agency (Sida)

Type of Resource

Webinar or Podcast

Languages

English

Relevant Topics

Core Topic

Climate & Transition Finance

Topic 2

Risk Management

Target Audience

Financial Services Providers

Governments & Policymakers

Education Providers / Think Tanks / NGOs

Relevant Geography

Global

Resource Description

This podcast transcript features Dr. Olaf Weber discussing how supervisors and regulators can use climate risk scenarios to assess and manage financial risks and opportunities from climate change.

Why This Matters

Scenario analysis equips financial supervisors and institutions to manage uncertain, complex climate risks and align stability efforts with broader sustainability goals.

Key Insights

Climate risks include physical risks from extreme weather and transition risks from policy and market shifts
Scenarios provide multiple possible futures, unlike forecasts, helping institutions prepare for uncertainty
Stress testing combined with scenarios allows assessment of exposure to climate-related risks in portfolios
Supervisors should integrate global and local scenarios, sector specifics, and policy options into their assessments
Scenarios can also connect climate risks with broader sustainable development goals such as health or equity

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