Eknath Belbase's article, "4 Questions To Ask About ESG As A Banking Executive" was featured in ValueWalk.
The Federal Reserve has convened a working group to examine the impact of climate risks on systemic risk within the financial system. Using staff research and engagement from other central banks, it is assessing climate risks and the impact they can have on financial stability by using methods such as climate scenario analysis.
If a risk is enough of a concern to potentially be of systemic importance to the Fed, it goes without saying that it could easily be a significant risk to any particular firm, especially those with concentrated geographic exposures.
Many conversations we have been having with institutions about incorporating increasing climate risks into their analytics have led to responses like, “We have an ESG group for that.” However, the perspective that climate is an ESG group issue is flawed. Institutional leaders need to educate themselves and their staff about the centrality of climate to risk management because climate risk is a central risk management issue, not merely something for your ESG group.