Fundamentals of Climate Risk Management

The changing climate is already impacting lives of millions of people and operations of thousands of businesses around the world. And with the businesses, also the financial institutions are feeling the first impact of climate change in their portfolios and balance sheets. Climate Risks are source of financial risks, require special consideration and are already getting increasing attention from regulators around the globe.

In this course, we start by covering the key facts about Climate Change and its implications on people, business models of firms and on portfolios of financial institutions around the world. We then review the recent and relevant developments in the Climate Change movements, political arena and business strategies of the leading firms. After setting the scene we introduce the key concepts of Climate Risk Management and explore the main aspects of physical and transitional climate risk drivers. Then we touch upon the extensive regulatory activities and guidelines and move into climate risk measurement and modeling . Here we elaborate on carbon measurement, climate data , impact on traditional credit risk models, ECL calculations and model risk management . As a next step we move on to the forward-looking aspects of Climate Risk Management and forecasting, in particular diving into Climate Risk Stress Testing and Scenario Analysis which are crucial for sustainable business steering . We will conclude our course by zooming into climate risk disclosure and reporting initiatives and discuss their relevance for climate risk measurement and modelling.

The course features more than 4 hours of video lectures , more than 50 control test questions, and includes real-life examples of methodologies and frameworks used in the industry combined with 80+ references to relevant background materials for further studies. A certificate signed by the instructor is provided upon successful completion.