Stress Testing and Climate Change

Year Published

2020

Contributing Organizations

International Monetary Fund (IMF)

Global Affairs Canada (GAC)

Toronto Centre

The Swedish International Development Cooperation Agency (Sida)

Type of Resource

Research/Insights Report

Tool

Languages

English

Relevant Topics

Core Topic

Impact Assessment

Topic 2

Climate Reporting

Target Audience

All

Relevant Geography

Global

Resource Description

This resource explains how climate change scenarios can be created and used in stress testing, how financial institutions might apply them, and how supervisors can encourage and support their adoption.

Why This Matters

Understanding climate-related risks, including quantifying them where possible, informs appropriate action. Stress testing and scenario analysis help build this understanding and may support timely and proportionate supervisory intervention.

Key Insights

Outlines key aspects of stress testing, including the elements of stress testing models
Analyses how climate change scenarios can be developed and translated into assumptions
Demonstrates how financial institutions apply stress testing and scenario analysis to climate-related risks
Identifies steps supervisors can take to adopt and encourage these tools in the institutions they oversee

Was this resource helpful?

We'd love to hear from you! You can share your feedback or suggest a resource below.

Share Your Feedback Suggest a Resource