Mazars logo Mazars logo Mazars logo Mazars Financial Services blog

Climate change : a threat to the stability of the financial services

With rising global temperatures[1]  comes an ever growing pressure on the financial services sector to respond and prepare for the far reaching effects of climate change. The impacts upon the sector are already being felt – extreme weather events are creating significant losses for insurers and credit risks for banks, and pressures on businesses to demonstrate sustainable businesses and incorporate ‘green finance’ are forcing firms to adapt their business models. The FSB, PRA and FCA have also each had their say in how companies should be adapting and managing their exposure to climate change risks.

So what are the key developments to date and how should the financial services industry be responding?

How does climate change impact the financial services sector?

Physical risks

Transition to a low carbon economy

Although the impact of the transition to a low carbon economy, partly driven by the Paris Agreement[2], will be seen more directly within the fossil fuel and utility sectors, there will be a huge indirect effect on many others including energy-intensive sectors.  In the financial services, the consequences will mainly be felt by financial institutions who have exposure to firms within these directly affected sectors.

Transition related financial risks

How have the regulators responded to date?

Task force on climate-related financial disclosures status report

Recognising the criticality of climate change not only for the environment but also for businesses and the economy as a whole, the Financial Stability Board (FSB) created the Task Force on Climate-related Financial Disclosures (TCFD) in 2015. The TCFD’s final report was issued in 2017 with a number of recommendations to help firms identify climate related risks: through better disclosures, helping market participants better understand and assess their risks and exposures, as well as recognising opportunities and recommending areas of improvement.

The Prudential Regulatory Authority (PRA) consultation paper

In October 2018, the PRA issued a consultation paper seeking views on a draft supervisory statement on “banks’ and insurers’ approaches to managing the financial risks from climate change”. In line with the TCFD approach, the proposals aim to outline effective ways to address financial risks arising from climate change.

How banks and insurers should be managing financial risks

  • Governance: The consideration of financial risks arising from climate change should be part of firms’ governance frameworks and, in order to ensure adequate oversight, senior management and board members should be held accountable.
  • Risk management: Firms will be required to identify, monitor, measure, manage and report on their exposure to these risks through their risk management frameworks.
  • Scenario analysis: Firms will be expected to use scenario analysis in order to measure the potential impacts of climate change-related risks in the context of their strategic plans.
  • Disclosure: Firms should consider whether the existing Pillar 3 disclosure rules on material risks will suffice or whether additional disclosures need to be put in place in order to better inform market participants.

The consultation closed on 15 January 2019. Next, the PRA will publish a Supervisory Statement to set out the rules to manage financial risks arising from climate change, in line with the results of the consultation. At the time of writing, we do not have a date for publication.

The Financial Conduct Authority (FCA) discussion paper

In parallel to the PRA, the FCA also launched a discussion paper in October 2018 on “Climate change and Green Finance”. Recognising the growing demand for green products, particularly in asset management and retail banking, as well as the need to identify and manage climate related financial risks, the FCA identified four priorities which require regulatory development:

  • Pension investments – considering the long-term nature of these investments, they will most likely be particularly affected by climate change.
  • Innovation – firms are encouraged to develop specialist green products whilst, at the same time, ensuring the good functioning of markets and outcomes for consumers.
  • Issuers of securities admitted to trading on a regulated market – entities falling under this category should give adequate and appropriate information to investors, allowing them to make informed decisions.
  • Public disclosure on climate related risks – financial services firms should report publicly on how they manage climate related risks. This requirement stems out of TCFD’s recommendations mentioned above. The disclosure aims to deliver transparency as well as to assess the areas with greater risk exposure and thus recognise any needs for further improvement.

Responses and feedback on this discussion paper are being requested until 31 January 2019.

Mazars’ commentary

The regulatory focus on sustainable finance and climate related-risks and issues will likely grow stronger in the coming months and years. Customers and the wider public express greater demand for ‘greener businesses’, a vast majority of the world’s public authorities are committed to tackling climate change and the financial regulators have started setting their expectations around risk management and governance. All these elements are setting the stage for increased transparency, regulation and necessary adoption of new business practices. Enhancements to risk-management approach, including the risks arising from climate-change, is already taking place, however more needs to be done in this area. Firms will be required to take a more strategic approach and analyse how actions in the present can impact the future financial risks.

To be better prepared for aligning their risk management and governance frameworks when the final requirements are issued, firms should begin to identify the climate-related risks that are tied to their individual business profiles and assess their magnitude. One of the key challenges of course will be the lack of reliable data to build models for estimating future climate change impacts.

Developing robust risk management frameworks around climate change will require long term efforts and continuous improvement as firms learn from their individual experiences and peers. The sector must be ready as this ever-present issue becomes routed in business agenda and sustainable approaches become more critical to long-term success.

Article written by Dharmina Chimanlal, Manager – Regulatory Affairs, Mazars UK.

Consultation Paper 23/18 (Prudential Regulation Authority) Enhancing Banks’s and Insurers’ approaches to managing the financial risks from climate change – October 2018
Financial Conduct Authority’s Discussion Paper 18/8 on ‘Climate Change and Green Finance’ – October 2018
Task Force on Climate-related Financial Disclosures Status Report – September 2018
Forbes article: “Exactly How Much Has the Earth Warmed? And Does It Matter?” – September 2018

[1] According to an ongoing temperature analysis conducted by scientists at NASA’s Goddard Institute for Space Studies (GISS), the average global temperature on earth has increased by about 0.8° Celsius (1.4° Fahrenheit) since 1880. Two-thirds of the warming has occurred since 1975, at a rate of roughly 0.15-0.20°C per decade.

[2] In 2015, representatives from nations across the world signed the Paris Agreement. The agreement, which came into effect in 2016, builds upon the United Nations Framework Convention on Climate Change and brings together more than 195 parties (as of November 2018). The agreement aims to keep the global temperature rise this century well below 2 degrees Celsius compared to pre-industrial levels. Signatory parties have agreed to go even further and work towards decreasing temperatures by 1.5 degrees Celsius.

Leila Kamdem-Fotso

Partner - Banking

Leila is a Partner within the UK Financial Services Consulting team. She qualified as a French chartered accountant (“Diplomee d’Expertise Comptable”) and has over 13 years of experience advising financial services firms on a wide spectrum of operational, regulatory and compliance matters. She has led the delivery of several assignments on behalf of regulators, including the Prudential Regulatory Authority, the European Commission and Her Majesty’s Treasury. Leila has recently performed impact assessment and remediation planning work in the context of Brexit.


    Fastidious replies in return of this matter with real arguments and telling all about that.

    Constant experience thee tinge may bee dangerous fⲟr thе people who’re understanding of allergies
    аnd respiratorry ρroblems. Τhe roof of yⲟur house as well as your
    patio and carport ѕhould weather tһe vagaries
    of suЬ-tropical climate ߋf Queensland throսghout tһe
    yeаr, уear afteг year. Recently, one οf the larger oneѕ ᴡas havіng troubles ԝith the roofing system.

    Help him along with cover up for him , nor expect immediate results.
    A player needs to read through the FAQ pages to learn whether a gaming site uses sixteen bit encryption or
    any other technology to make its online transactions
    secured. You want to check the etiquette from the online sites and do they give
    safeguards and tips.

    Kelvin Faiz

    We Facilitate Bank Guarantee (BG) & Standby Letter of Credit (SBLC) Instrument Direct Mandate Provider of Fresh Cut Bank

    Instrument for Lease/Purchase such as BG, SBLC, MTN.

    Intermediaries/Consultants/Brokers are welcome to bring their clients and are 100% protected We are direct to a provider for BG

    /SBLC Issuance by HSBC London/Hong Kong or any other AA rated Bank in Europe, Middle East or USA.

    Our BG/SBLC Financing can help you get your project funded, loan financing by providing you with yearly renewable leased bank

    instruments. We work directly with issuing bank lease providers, this Instrument can be monetized on your behalf for 100%

    funding: For further details contact us with the below information.
    Skype: d65e4bb0261e5ece


    We offer Cash & Asset Backed Financial Instruments such as Bank Guarantee and Standby Letter of Credit (BG/SBLC) for lease and sale, and loan facilities. We offer Verifiable Bank Instruments via SWIFT from genuine providers capable of taking up time bound transactions. Issuance is by AA rated Bank in Europe, Middle East, Asia and USA.

    Our Instruments are easily monetized on your behalf for project funding. Our rates depend on the face value of the instrument needed, we can also monetize the same BG/SBLC for up to 100% cash proceeds if you do not have a monetizer.

    Please contact me for full details:



    Whatsapp : +15137819374

    Hi there, the whole thing is going well here and ofcourse every one is sharing facts, that’s really
    good, keep up writing.

    Some people alternatively pay a lot cash at one time to
    raise the chance of profitable. The system the place betting cash is thru your bank is secure to work with, and the transaction is always between your account and
    the Ladbrokes. Easy system described in steps.
    Many are easy people just struggling to get by. This guide offers all
    the info you could get into the game. However the factor is that to increase
    your probabilities of successful, you need to position a wager each day.
    As an alternative, you are able to get all the data you need from that very same site.
    As lengthy because the owner of the Bitcoin looks after it correctly using a high-security
    wallet and two-factor authentication, will probably be extremely difficult for anyone else to get access to their funds.

    At any level, nonetheless, the bookie can soar in and make changes to
    the strains that can be found to his players if is aware of he will likely be getting heavy one sided

    In case you are a type of people who doesnt like cats,
    Im sorry to hear that. For the above example, it will look like -7.5 (-110).
    Other players can legally purchase Mega Millions Lottery tickets online by
    means of the lottery agent you see talked about above.
    As an illustration, MEGA Hundreds of thousands
    is a multi-state lottery and it operates in 11 states.
    As an illustration, you would not want to pick simply any race horse in hopes of winning a bet.
    5. Wager on sports by placing your wager. When you click on on the sport of your choosing make sure to bookmark the page so you will all the time have
    essentially the most present and updated sports betting odds at
    your disposal. In this methodology, you might choose a low number from the given set similar to 1-50 like
    1. Some successful numbers have two consecutive numerals, although not all the time.
    After which with the time you saved do something
    extra productive than you’d have carried out appearing like a poor individual.

    May Gary

    We are major/Direct providers of Fresh Cut BG, SBLC, POF, MTN, Bonds and CDs and this financial instruments are specifically for lease and sale.We are one of the leading Financial instrument providers with offices all over Europe. 
    We are major/Direct providers of Fresh Cut BG, SBLC, POF, MTN, Bonds and CDs and this financial instruments are specifically for lease and sale.We are one of the leading Financial instrument providers with offices all over Europe. 
    we always deliver on time and precision as Set forth in the agreement. You are at liberty to engage our leased facilities into trade programs, project financing, Credit line enhancement, Corporate Loans (Business Start-up Loans or Business Expansion Loans), Equipment Procurement Loans (Industrial Equipment, Air crafts, Ships, etc.) as well as other financial instruments issued from AAA Rated bank such as HSBC Bank Hong Kong, HSBC Bank London, Deutsche Bank AG Frankfurt, Barclays Bank , Standard Chartered Bank and others on lease at the lowest available rates depending on the face value of the instrument needed, Our Terms and Conditions are reasonable. 

    1. Instrument: Bank Guarantee (BG)/SBLC (Appendix A) 
    2. Total Face Value: 10M MIN to 50B MAX USD or Euro 
    3. Issuing Bank: HSBC, Deutsche Bank Frankfurt, UBS or any Top 25 . 
    4. Age: One Year, One Day 
    5. Leasing Price: 4 1% 
    6. Sale Price: 32 2% 
    7. Delivery by SWIFT . 
    8. Payment: MT103-23 
    9. Hard Copy: Bonded Courier within 7 banking days 

    We are ready to close leasing with any interested client in few banking days, if interested do not hesitate to contact me direct. 

    Name:May Gary 

    Betberry is the official in addition to trusted agent
    in Dalam negri that gives soccer betting, casino, joker123 shooting, s1288 penis fighting and online slots.
    Betberry is one associated with the sites that has been established since 2014.
    With a total regarding hundreds of thousands a lot more members throughout Indonesia,
    Betberry online betting is really popular ranging from teens to adults.

    Given the degree of enthusiasm of people, all of us as a team created an established blog page of official2018 to be able
    to provide more information and knowledge about online gambling betting and how to win wagers.

    BETBERRY SITE IS OFFICIALLY RELIABLE gambling agent given that 2011
    Being a trusted on the internet betting site with the largest
    number of users in Asia, has a good official gambling site of which has
    been established since 2011, namely Betberry.
    Betberry provides various games this kind of

    Maxbet Ball Gambling Games,
    Sbobet Soccer Betting Game,
    Online Casino Video games,
    Joker123 game shoot seafood,
    The S1288 cock fight game,
    Plus much more.
    To accessibility Betberry it is likewise very easy to access, just about all you have
    to perform is copy the betberry url address create the link in a new new tab.

    Not only convenience, various bonuses offered by Betberry are
    also really various and interesting. Nicely, one of the best-selling bonuses is
    the welcome reward of 20% for sportsbook games. Only by looking into
    making the first deposit, your ID will immediately
    be put into 20% of the very first deposit. How
    to state this bonus is pretty easy, you only need to confirm with CS,
    then your added bonus will be filled. Regarding withdrawals, it’s not too difficult you only have
    got to reach WIN 6x total (bonus + deposit), you can win WD
    with the 20% bonus that we have provided. Very
    interesting promo right?

    Betberry who else has been going through the globe of online gambling regarding 8 years.

    It constantly wants to give the finest for each
    and every member or potential new members who wish to sign up for.
    With Betberry’s trusted online betting site, consequently , several of the leading areas according to Betberry.
    The primary headlines or focus to be improved this season are usually as follows:

    Interesting Promos: Betberry is confident that will attractive gambling promos
    will certainly make players feel more comfortable playing.

    Faster DP or WD services: Betberry usually offers faster processing services and in less compared to 3 minutes you are able to perform and withdraw their
    24/7 service: 24 hour without stopping service, always providing the
    best service and assisted by professional staff.
    Transactions with local banks: By offering a local bank.

    Then this will be simpler for you whenever making a
    Latest security technology: Your security and privacy are the golden gates needed to maintain 100% as much as possible for your current convenience.

    The noble objective of the Betberry agent,
    of course, is based on rules and regulations.
    Which incidentally has been with us within the gambling world given that since the beginning.
    That is, producing the world of gambling one of the best
    solutions for the particular public in the planet.
    To play finance with out breaking the rules. The best fix is to provide the best
    online gambling game facility. In this specific way all activities in addition to transactions must be carried out online
    without breaking the particular rules.

    Every weekend i used to pay a visit this website, as i want enjoyment, for the reason that this this site conations genuinely pleasant funny information too.

    Quality articles or reviews is the main to attract the users
    to go to see the site, that’s what this web site is providing.

    Pretty! Thiѕ һas been а really wonderful article. Ⅿany thanks for supplying tjis informatіon.

    Исполняя условия вейджера по
    одному виду бонуса, в течении игры он становится владельцем последующего


    With recession revolving around world businesses due to the scourge of pandemic, finding a genuine provider of financial instrument is very challenging but we certified Financial Instrument providers in ireland are looking forward to assist potential clients in the most possible way. Presently, we only focus on BG/SBLC for Lease and Sale transactions. However, our Lease BG/SBLC is 4+2% and Sale at 32+2%.

    Should you find this interesting and acceptable? Kindly, contact us and we shall review and respond with draft Contract/MOU within 24hrs maximum.

    Please request for full procedure details if interested.

    For further inquiry contact:

    E-mail :
    Skype id

Add New Comment

Leave a Reply

Your email address will not be published. Required fields are marked *