. EIOPA recently published its Supervisory Convergence plan 2021 stating ‘EIOPA will be taking step-by-step measures for integrating the
assessment and management of Environmental, Social and Governance (ESG) risks into prudential and conduct supervision’. EBA, EIOPA and ESMA have drafted the Regulatory Technical Standards (RTS) under the Sustainable Disclosure Regulation (SFDR) and Klaas Knot (president of DNB) recently told an audience at Bruegel that ‘for economic transformation to take hold, you need to have relative prices that reflect the true scarcity of economic resources. In this case, by pricing in the climate cost of greenhouse gas emissions’.
Climate risk at least includes physical risks stemming from changing
climate itself, and changes in investment conditions due to the
transition towards a low-carbon economy (transition risk). In its
research ‘Tijd voor Transitie’ (2016), DNB already indicated a potential
material impact of transition risk for insurers and pension funds. In
this article, we explore this effect further and present a case study
with a practical approach to address and quantify climate change
related asset risks within an ORSA setting.
Climate Transition Risk - A Quantitative Impact Study for ORSA Scenarios
Kennisbank •
dr. Mario Zacharias, Daniel Teetz MSc, Yoeri Arnoldus MSc AAG
dr. Mario Zacharias, Daniel Teetz MSc, Yoeri Arnoldus MSc AAG
Since the Paris Agreement, climate change is gaining attention by the day. In the financial sector, legislative and regulatory bodies are at the forefront of developments.
