Financial Institutions Need to Start Building a Climate Dashboard

Regulators are sending a message by doing climate stress tests that using incomplete data and simple methodologies is preferable to doing nothing. Financial institutions that acknowledge that climate change is having a financial impact on them and that this will grow in the future should take the same approach.

Climate stress testing is going mainstream, with 31 regulators having completed or begun one, so banks need to keep up their work on climate-related risksFinancial institution (micro-level) climate risk metrics measure different things than regulatory (macro) climate stress tests, and banks should look at the results of both types togetherFinancial institutions should connect their climate risk metrics to see how they are impacted when adopting short-...