Identifying environmental risks in the banking sector

We worked with a financial services client to identify environmental and climate change risks associated with investment portfolios and client activities that posed a significant reputational threat in the short, medium and long term.

• Challenge

  Financial firms view climate change and the environment as material issues, both in terms of direct investments and in the activities of those they extend services to. But policy changes, regional differences and shifting attitudes mean reputational risk is evolving, resulting in the need to maintain vigilance for emerging threats.

• Solution

  We assessed current and emerging environmental and climate change trends with the potential to affect the banking sector’s risk profile. Our analysis included looking at challenges faced by other major banks to provide insight into how reputational threats may impact the client directly or the sector as a whole.

• Outcome

  Our comprehensive reporting informed the client’s strategic decision-making around reputational risk management on environmental issues. The report allowed the client to identify, prioritise and monitor developments in the environmental risk landscape that could present significant reputational threats.