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Supervisory
approach to
Climate Risks

Understand how C&E risks are integrated in the key
supervisory processes
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Content

With an evolving regulatory landscape for climate-related and other environmental (C&E) risks, both banks and supervisors are expected to adapt their practices on an on-going basis. This course explains how supervisory practices are evolving in the context of C&E risks and what this means for banks. It also provides context to how the SSM monitors banks’ C&E risk management practices. The following themes will be addressed:
  • Regulatory landscape – A comprehensive overview of relevant prudential regulations in the context of C&E risks is provided.
  • Supervisory practices – The integration of C&E risks in micro-prudential supervision is outlined, focussing on the role of the ECB Guide [2020] and explaining how C&E risks are integrated in key supervisory processes, including the SREP, on-sites and monitoring of findings.
  • Supervisory assessments – The supervisory assessment framework for C&E risks is outlined, helping to interpret how supervisors view banks’ practices and what supervisory tools are available to escalate.

    Learning Goals

    After completing this course, the participants will be able to:

    • Gain an overview of C&E-related regulatory developments, covering relevant prudential regulations, expectations, and actors
    • Understand how C&E risks are integrated in the key supervisory processes and priorities going forward
    • Understand the ECB’s supervisory expectations and how supervisors are assessing compliance towards them

    Target Audience

    The course module is intended for

    • Risk managers
    • IRB model developers and validators
    • Auditors
    • Specialist supervisors and JST members

    Prerequisites

    The material will be taught in English. Participants are advised to come equipped with a general understanding of prudential risk and regulation.

    Schedule

    The course consists of one session of 4 hours. The track schedule will be planned in coordination with the client.

    Example case studies

    For this module, examples of case studies are

    • Understanding how the materiality of C&E risks influences supervisory expectations
    • Taking up the role of a supervisor assessing C&E risk management practice

    Please Contact us for details and options.