Together with its members, UNEP FI has created numerous tools, methodologies, and guides to empower banks to better disclose and manage their climate risks. Find all the resources developed by UNEP FI’s TCFD banking programme below:
Tools and assessment methodologies
Extending our Horizons: Assessing Credit Risk and Opportunity in a Changing Climate– Published in April 2018, the report details the jointly developed methodology for scenario-based assessment of the transition-related risk and opportunities.
Navigating a New Climate: Assessing Credit Risk and Opportunity in a Changing Climate – The second report, released in July 2018, covers physical risk assessment methodologies.
Charting a New Climate (with Acclimatise)- a state-of-the-art blueprint to support financial institutions in navigating the changing physical climate risk landscape. The report explores physical risk data, tools, correlation analyses, heatmapping, and opportunity identification among other crucial topics.
Beyond the Horizon– an exploration of the ways in which the UNEP FI TCFD program advanced transition risk analysis. A major feature of the report is a comprehensive transition risk heatmap developed by the participating institutions that provides perspectives into how climate-sensitive sectors may be impacted by a low-carbon transition.
Transition Check (with Oliver Wyman)- a user-friendly webtool that enables financial institutions to assess transition risks across a wide range of geographies, economic sectors, and climate scenarios (including the latest NGFS scenarios). Transition Check produces loss estimates, PDs, and LGDs in a clean, downloadable format to support internal assessments and TCFD reporting.
The Climate Risk Landscape: Mapping Climate-related Financial Risk Assessment Methodologies provides a summary of the key developments across third party climate risk assessment providers since May 2019, including new and updated scenarios, methodological tools, key guidelines, as well as an overview of the changing regulatory landscape and potential developments into 2021.
Climate Tango: Principles for integrating physical and transition climate risk assessment with sectoral examples, produced with ClimateWise, explores the combined financial impact of physical and transition risks. It includes theoretical principles and practical steps for implementation of an integrated assessment of physical and transition risks with examples of sectoral analysis
The Climate Risk Tool Landscape: 2022 Supplement gives financial institutions insights into the process, challenges, and outputs related to using selected climate risk tools through detailed case studies from 15 financial institutions .
Managing Transition Risk in Real Estate: Aligning to the Paris Climate Accord assesses the state of real estate assets and the challenges the sector faces to align to net zero. It provides insights on the climate challenges confronting the real estate sector, and recommendations for addressing them.
Steering the Ship: Creating Board-Level Climate Dashboards for Banks, produced with GARP, assesses the state of real estate assets and the challenges the sector faces to align to net zero. It provides insights on the climate challenges confronting the real estate sector, and recommendations for addressing them.
Climate scenarios (physical and transition risk pathways)
Pathways to Paris: A practical guide to climate transition scenarios for financial professionals is a detailed guide, in partnership with CICERO, for financial sector practitioners looking to understand and apply climate scenarios in a financial risk context. This paper also contains case studies from participating banks that capture their experiences using climate scenarios.
Decarbonisation and Disruption: Understanding the financial risks of a disorderly transition using climate scenarios covers two primary themes of relevance to financial institutions, with support from Oliver Wyman. First, it examines sector specific risk drivers that could result in a disorderly transition, making the argument that climate transition risk is a significant near-term threat to much of the economy. Second, the report explored how these risk drivers are currently being modeled in climate scenarios produced by major integrated assessment models (IAMs). The paper also includes bank case studies.
This comprehensive Good Practice Guide to Climate Stress Testing is a detailed user guide for financial institutions looking to understand climate stress testing and develop plans for effectively executing them. It has been created to assist the financial sector in its climate stress testing journey and should be adapted to meet the needs of a given firm.
Economic Impacts of Climate Change: Exploring short-term climate-related shocks with macroeconomic models features three new climate-driven macroeconomic shock scenarios developed by UNEP FI and NIESR as part of UNEP FI’s Taskforce on Climate-related Financial Disclosures (TCFD) Programme. The three short-term scenarios are: sudden rise in carbon price, spike in oil price and trade war
Reporting and regulatory guidance
From Disclosure to Action– a stock-take on how financial institutions are incorporating climate risk into their operations. Numerous bank case studies and UNEP FI TCFD participant survey results provide details on the latest practices. The paper also provides concrete and actionable guidance on integrating climate risk throughout an organization.
TCFD Playbook (with the Institute for International Finance)- developed through consultation with member financial institutions, this document provides guidance on and examples of leading practices around TCFD reporting in the financial sector. This desk reference also aims to enhance the depth and comparability of TCFD disclosures by financial institutions.
Supporting client engagement
Leadership strategies for client engagement: Advancing climate-related assessments is designed to support the financial sector to improve assessment and interactions with clients in line with net zero plans. It builds on the University of Cambridge Institute for Sustainability Leadership’s Banking Environment Initiative Let’s Discuss Climate: the essential guide to bank-client engagement.
The report “How banks incorporate climate change in their risk management – 1st survey in Latin America & the Caribbean” was undertaken by UNEP FI and CAF – Development Bank of Latin America, in collaboration with the Latin American Federation of Banks (FELABAN). It showcases the level of knowledge, current commitments and future goals on climate risk management of the banking sector in the region. The 78 banks that were part of this study belong to 11 countries in the region.
- CICERO Climate Finance
- Cambridge Institute for Sustainability Leadership
- GARP Global Sustainability and Climate Risk Resource Center
- Oliver Wyman Climate Hub
- Carbon Brief Q&A: How integrated assessment models are used to study climate change (primer)
- Columbia University Earth Institute Integrated assessment modeling: Ten things to know (primer)
- Climate Analytics IAMs: what are they and how do they arrive at their conclusions? (primer)
- IEA World Energy Outlook (IEA models and forecasts)
- IIASA 1.5ᵒC Scenario Explorer (visualizations and data from a wide range of 1.5ᵒC IAMs)
- Integrated Assessment Modeling Consortium (documentation on IAMs)
- NGFS Scenario Explorer (visualizations and data from the NGFS scenarios)
- Senses Toolkit (visualizations and explanations of IAM scenario assumptions)
- Transition Check (scenario visualizer and transition risk tool)
Guidance materials from public authorities and industry entities
- UK FRC Financial Reporting Lab Guide
- EU EFRAG report and supplementary materials
- JFSA TFCD Consortium of Japan
- IIF TCFD best practices
- IFoA user guide
- CDSB Application Guidance
- NGFS Climate Scenarios for Central Banks and Supervisors
- NGFS Guide to Climate Scenario Analysis for Central Banks and Supervisors
- BOE Biennial Exploratory Scenario 2021- Climate Change Discussion Paper
- ETH Zurich Taming the Green Swan: How to Improve Climate-Related Financial Assessments
- Grantham Institute Climate Change Laws