【COP29 Side-Event】Supporting Climate Change Risk Management Practices: The Role of Financial Institutions Beyond Information Disclosure

Day：2024.12.16

event ｜

Reporting party

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Ryo Hibiya Environmental Management and Climate Change Group, Global Environment Department Technical Advisor

Outline

Date: November 19, 2024
Host: International Development Finance Club (IDFC)
Name of venue (pavilion name): International Development Finance Club (IDFC) Pavilion

Speaker

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Claire Echalier Institute for Climate Economics (I4CE) Development Finance Program Director
Jaspreet Kaur Climate Policy Initiative (CPI) Analyst
Remco Fischer United Nations Environment Programme and Finance Initiative (UNEP FI) Head of Climate Change Division
Natasha Chaudhary Institute for Climate Economics (I4CE) Principal Researcher, Climate Risk
Alina Mika European Bank for Reconstruction and Development (EBRD) Head of Environmental and Financial Systems Division
Nora Lambrecht Inter-American Development Bank（IDB) Senior Environmental and Social Officer for Climate Change
Amal Benaissa Bank of Africa（BOA) Head of Sustainability Division
Komlanvi Moglo Bank of West Africa（BOAD) Environmentalist
Yukichi Usui JICA Director, Environmental Management and Climate Change Group, Global Environment Department

Background and purpose

The event focused on recent findings on climate risk management as it relates to financial institutions, sharing their experiences and discussing how financial institutions can work together to better manage climate risk and how they can develop financial products that adapt to the risks their counterparties may face.

Contents

  • In the introduction, Echalier of I4CE said that financial institutions integrating climate-related risks into their frameworks and strategies can play an important role in enhancing the resilience of developing countries to climate impacts.
  • Kaur of the CPI said that financial institutions and investors can mitigate climate risks and create positive changes in their own markets by successfully integrating strategies that contribute to climate action into their decision-making.
  • Fischer of the UNEP FI said that the Task Force on Climate-related Financial Disclosures (TCFD) is beginning to transform the ESG investment market, and stressed the importance of financial institutions analyzing and identifying issues for their counterparties.
  • Chaudhary of I4CE said that current practices in the financial industry generally fail to adequately identify risk assets, and emphasized the need for private financial institutions to rethink their management approach to stranded assets risk and shift to a broader concept of ""assets at risk. He emphasized the need for private financial institutions to rethink their management approach to stranded assets risk and shift to a broader concept of assets at risk.
  • During the panel discussion, Mika of the EBRD began by noting that all EBRD investments are subject to a climate risk assessment, and that it is important to analyze the vulnerability of the recipient to climate change and the sectors with the highest emissions.
  • Lambrecht of IDB noted that the IDB is further strengthening its alignment with the Paris Agreement and is conducting pilot projects to address climate stress, as climate risks have already become apparent and are being recognized. He stated that there is a need to expand adaptation support for small farmers and other clients vulnerable to climate impacts.
  • Benaissa of BOA, referring to accelerating climate change and recent geopolitical risks, said that the climate scenarios on which financial risk measurement is based need to be constantly fine-tuned.
  • Moglo of BOAD introduced the climate shock resilience loan program launched this year. He said that the Bank hopes to gradually expand the geographic coverage of its insurance products related to early warning systems.
  • Usui of JICA stressed the need to reduce vulnerability in each development sector while pursuing co-benefits with development projects, and the need to increase resilience and minimize loss and damage, referring to preventive disaster management.

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Director Usui of Environmental Management and Climate Change Group in JICA presented at the panel discussion

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