Scoping a framework for assessing climate risk for a UK Bank

Summary

Little Blue Research completed a rapid risk assessment of the potential effect of climate change on Triodos Bank UK’s loan portfolio. Work included piloting approaches to identifying and valuing risk to help meet new requirements from the Prudential Regulation Authority (PRA) and identifying data gaps.

Client description

Triodos UK Bank

720,000+ customers

Capitals

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NATURAL

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PRODUCED

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Client need

Triodos Bank UK required technical support to identify options for scoping a framework for evaluating climate change risk to their loan portfolio. As a leader in sustainable finance, Triodos was crucially aware of the importance of this issue and wanted guidance on the risks facing its customers.

The challenge

The results

Prioritising areas for assessment by considering regional location and commercial asset types.

Combining banking data with climate data and overcoming challenges associated with the use of different software tools and formats.

Workshop setting out review results and suggested next steps for discussion with the bank’s risk and operations teams.

Summary of outputs from review work and pilot assessment, identifying how Triodos Bank UK’s current data can be used, data gaps, and proposed actions and next steps.

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