Few financial institutions comprehensively assess climate risks: Bank of Russia survey
Only a small percentage of financial institutions include all the risks related to greenhouse gas emission reductions and climate change adaptation in their corporate risk management systems. These are the findings of the survey conducted by the Bank of Russia to evaluate compliance with its recommendations.
Compared to non-governmental pension funds and insurance companies, banks are more involved in the climate agenda, with some of them already stipulating relevant terms in loan agreements.
The Bank of Russia’s monitoring of climate and environmental strategies pursued by major non-financial companies shows that they have started to disclose climate-related information better and set more ambitious targets. However, environmental targets are frequently formal.
Russia’s trading partners continue the transition to a low-carbon economy, introducing regulation that will affect international trade. Therefore, the Bank of Russia will detail the methodologies on how to take into account climate risks and develop recommendations on climate risk management for banks. Furthermore, it is planned to continue climate risk stress testing and encourage financial institutions to assess these risks on their own.