Most UK insurers, banks unprepared for risks of climate change

The Bank is holding a consultation, led by Breeden, on stress-testing lenders and insurers on their exposures to global warming and the risks associated with a shift to a lower-carbon economy. She addressed the topic with more than 100 finance leaders at an event hosted by Odgers in London.


The Bank of England faces an uphill climb to get the finance industry ready for one of its biggest threats: the climate.

 

About 80% of senior finance executives believe their firms “lack well-developed strategies to manage the risks of climate change,” according to a poll of around 700 U.K.-based financiers by executive search firm Odgers Berndtson.
 

“Every single asset on the planet will have a different value in a world of net zero,” Sarah Breeden, executive director at the Bank of England, said in a statement Thursday. “This affects infrastructure, properties, transport and even agriculture –- and so the need to transition creates a very broadly-based risk.”

 

The Bank is holding a consultation, led by Breeden, on stress-testing lenders and insurers on their exposures to global warming and the risks associated with a shift to a lower-carbon economy. She addressed the topic with more than 100 finance leaders at an event hosted by Odgers in London.

 

Once dismissed as a social or scientific concern, the effects of rising global temperatures are becoming financial risks. Larry Fink, chief executive officer of BlackRock Inc., said earlier this month climate change had become a “defining factor in companies’ long-term prospects” that will cause a “fundamental reshaping of finance.”
 


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