Climate-Related Financial Risks: Measurement, Management and Disclosure

Climate change is increasingly creating financial risks for businesses, financial institutions, investors, governments and other economic actors. Flooding, drought, extreme temperatures, rising sea levels and other physical climate events can disrupt operations, damage assets, affect supply chains and weaken borrowers' ability to repay loans. At the same time, the transition toward a low-carbon economy creates additional risks through changes in regulation, technology, consumer preferences, energy systems and market conditions.

These developments have made climate-related financial risk an important component of modern risk management. Financial institutions, in particular, need to understand how climate risks can affect credit risk, market risk, liquidity risk, operational risk, investment portfolios and long-term financial performance.

The development of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations helped establish a structured approach around Governance, Strategy, Risk Management, and Metrics & Targets. The TCFD's work was subsequently incorporated into the work of the International Sustainability Standards Board (ISSB). IFRS S2 Climate-related Disclosures now provides specific requirements for reporting climate-related risks and opportunities and integrates the TCFD recommendations.

IFRS S2 requires organizations to consider climate-related physical risks and transition risks, and to disclose information about how these risks could affect their cash flows, access to finance and cost of capital over the short, medium and long term. It also covers climate-related opportunities.

The course therefore provides participants with practical knowledge for identifying, measuring, managing and communicating climate-related financial risks. It also introduces participants to climate scenario analysis, climate risk metrics, greenhouse-gas emissions information, transition planning and climate-related financial disclosures.

Course Objectives

At the end of this training, participants will be able to:

• Understand the concept of climate-related financial risk and its relevance to modern enterprise and financial risk management.
• Distinguish between physical climate risks and transition risks and understand how each can affect an organization.
• Identify the potential impact of climate change on credit, market, liquidity, operational, strategic and reputational risks.
• Understand the relationship between climate risk, financial performance and long-term business sustainability.
• Develop appropriate approaches for identifying, assessing and prioritising climate-related risks.
• Understand how climate risks can be incorporated into an organization's Enterprise Risk Management (ERM) framework.
• Learn techniques for measuring and quantifying climate-related financial risks.
• Understand the use of climate risk indicators, metrics and Key Risk Indicators (KRIs).
• Develop an understanding of climate scenario analysis and stress testing for assessing organizational resilience.
• Assess how different climate scenarios can affect financial assets, portfolios, investments, operations and business models.
• Understand the fundamentals of greenhouse gas emissions measurement, including Scope 1, Scope 2 and Scope 3 emissions.
• Understand the key requirements and principles of IFRS S2 Climate-related Disclosures.
• Understand how climate-related disclosures connect with governance, strategy, risk management, metrics and targets. IFRS S2 specifically requires disclosures covering these areas.
• Understand how to develop effective climate-related risk management policies and procedures.
• Learn how to incorporate climate considerations into investment decisions, lending decisions and financial planning.
• Understand the relationship between climate risk, ESG, sustainable finance and corporate governance.
• Identify practical approaches for developing climate transition plans and climate-related targets.
• Improve the quality, consistency and decision-usefulness of climate-related financial reporting.
• Understand how climate-related financial information can support investors, lenders, regulators, boards and other stakeholders in making informed decisions.
• Develop a practical roadmap for implementing climate-risk measurement, management and disclosure within an organization.

Benefits of the Course

Participants will benefit from the training in the following ways:

1. Better Climate Risk Identification

Participants will be able to identify physical and transition risks that could threaten their organization's financial position, operations and long-term strategy.

2. Improved Risk Management

The programme will help organizations integrate climate-related risks into their existing Enterprise Risk Management, operational risk, credit risk and strategic risk frameworks.

3. Stronger Financial Decision-Making

Participants will understand how climate-related factors can influence lending, investment, capital allocation and other financial decisions.

4. Improved Climate Risk Measurement

Participants will gain practical knowledge of climate risk metrics, indicators, scenario analysis and stress-testing techniques.

5. Enhanced Regulatory & Disclosure Readiness

Participants will develop an understanding of IFRS S2 and how organizations can prepare decision-useful climate-related financial disclosures. IFRS S2 requires information about governance, strategy, risk-management processes and performance relating to climate risks and opportunities.

6. Better Understanding of Scenario Analysis

Participants will learn how to use different climate scenarios to assess the resilience of an organization's business model and strategy. IFRS S2 includes climate-related scenario analysis as part of assessing and communicating climate resilience.

7. Improved Investment & Credit Decisions

For banks, investors and financial institutions, climate risk analysis can provide an additional perspective when assessing borrowers, investments, projects and portfolios.

8. Enhanced Corporate Governance

Participants will understand the responsibilities of boards, senior management, risk functions and other stakeholders in overseeing climate-related risks.

9. Better Business Resilience

Organizations can use climate-risk analysis to identify vulnerabilities in their operations, supply chains, assets and business models and develop appropriate mitigation strategies.

10. Competitive Advantage

Organizations that effectively understand and manage climate-related risks can be better positioned to respond to changing regulations, investor expectations, market conditions and financing requirements.

11. Better Sustainability Reporting

Participants will gain knowledge that can help their organizations produce more consistent and useful climate-related disclosures.

12. Practical Application

The training can be structured around practical case studies, risk assessments, scenario analysis and disclosure exercises, allowing participants to apply the concepts directly to their organizations.

Who Should Attend

This programme is suitable for professionals responsible for risk, finance, sustainability, compliance, governance, investment and corporate reporting.

Banking & Financial Institutions

Risk Managers

Internal Auditors

• Finance & Accounting
• Sustainability Reporting Professionals
• ESG & Sustainability
• Sustainability Reporting Officers
• Governance, Compliance & Assurance

• Risk & Compliance Consultants
• Other Organizations
• Insurance companies
• Asset management companies
• Investment companies
• Fintech companies
• Oil & gas companies
• Manufacturing companies
• Telecommunications companies
• Energy companies
• Government agencies
• Regulatory institutions
• Development finance institutions
• NGOs and international development organizations
• Professional services and consulting firms
• Senior Management

Course Booking

Please use the "Book Now" or "Inquire" buttons on this page to reserve your space or request for more information