Convened by the UN Environment Finance Initiative (UNEP FI), the banks, which include Barclays, BNP Paribas, Santander and Société Générale, aim to help other banks be more transparent about their exposure to climate-related risks and opportunities and inform strategies to benefit from the low carbon transition.
The methodology is designed to build upon existing risk assessment expertise, procedures and models, enable informed assessments of how risks and opportunities might develop in the future.
The banks say it will allow institutions to examine risk and opportunities across a range of geographies and sectors.
John Colas, Oliver Wyman Partner and Vice Chairman of Financial Services Americas, said: “Through this highly collaborative effort of scientists, risk practitioners and sustainability experts, we have set forth an innovative methodology that will serve to underpin enhanced climate-risk aware decision making and resource allocation.
“We expect that this methodology will be further strengthened, as practices evolve and new and more granular data emerges from industry practitioners, corporates, policy makers and climate scientists.”