Climate-related Financial Risk Course

Dr Ben Caldecott, Director of Oxford Sustainable Finance Group: Climate change, the impacts of climate change are reshaping sectors of the global economy. Physical climate impacts already having a pronounced effect on the value of assets, on livelihoods, on welfare around the world. There is a growing risk around litigation and liability associated with climate change. How societies react to tackle climate change through policy, through regulation, through technological change, through social norms and so on and so forth, is also significant. So these factors are really very significant material risks today, they look set to grow. This is the reason why Mark Carney at the Bank of England and now 40-plus different financial regulators and central banks have said that climate-related risk is something that they need to be concerned about as managers and supervisors of the financial system, their financial stability. So this is one of the biggest issues facing economies facing corporations facing financial institutions, and so the course is all about that – understanding that, and then turning that into something that's actually going to make a difference in your institutions, and primarily it's focused on measurement and management and disclosure, and it touches on the whole range of issues.

So the first day of the course is focused on really getting the latest updates on the science, the social science, the legal opinions on these risks, physical risks, transition risks, liability risks, associated with climate change, and then the other the other days of focus on sort of building up the toolkit for how you measure, manage, disclose, integrate, these things into your respective institutions. So what's the right data, what are the best data sets to use, what scenarios should you be using, what projections, and how do these things come together into models, and what results are going to be useful to drive different choices, different decisions if you're a bank or an asset manager, an asset owner, government – these are all questions that we seek to explore and it's a rapidly developing area, the TCFD itself is quite new, the Supervisory statement from the Bank of England is also very new and there are other regulatory changes coming through, and even if there wasn't regulatory change it would make sense for your institution, your home institution, to think about this systematically.

The climate-related financial risk course is designed for people working in organisations who are looking to integrate climate-related financial risk into strategy and into management in their own institutions, and it's really also meant for people that are working closely on the Task Force on Climate-Related Financial Disclosures, the TCFD, for preparing disclosures under that framework, and also for people that might be responding to increased regulatory supervision on climate change, and we've seen this over recent years, and in particular the Bank of England's supervisory statement on climate change that came out in April this year, 2019.

Sir Martin Smith, Founder of the Smith School of Enterprise and the Environment: In the end this is all about people, so getting people from those companies to come and learn what's happening at the cutting edge of environmental thinking at a university like ours, it seemed to us, and I think the evidence is there, has the potential to create considerable impact.

Dr Ben Caldecott: So if you're in institutions thinking about climate-related financial risk, how do you measure it, how do you manage it, how should you disclose it, how should you report it, how should you systematically integrate this into a variety of different functions in your institution, that's the course for you.