On 1 April 2020, the De Nederlandsche Bank (DNB) published Q&A and Good Practice on 'Integration of climate-related risk considerations into banks' risk management'.
22 May 2020
Climate risks are more explicitly included in banks' risk management. In order to manage these risks properly, DNB has drawn up a Good Practice for banks with guidelines for integrating climate-related risks into the governance, risk management and reporting of banks. In these Q&As, the DNB gave its interpretation of how existing legislation applies to climate-related risk management.
Banks can be vulnerable to the physical consequences of changing weather (physical risks) and to the consequences of a transition to a climate-neutral economy (transition risks). Given the potential impact of these climate-related risks, DNB expects banks to analyse and describe the impact of this on their risk profile. If there is a material risk, DNB expects banks to manage these risks - like any other conventional risk.
This article was originally published in the April edition of REGWATCH. Read the full edition covering the following jurisdictions:
- European Union
- Hong Kong
- United Kingdom