Page 130 - BFSI CHRONICLE 10 th Issue (2nd Annual Issue ) .indd

BFSI Chronicle, 2 Annual Issue, 10 Edition July 2022
th
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effect by the end of the century some countries of climate change and what kind of solutions
are bound to disappear unfortunately in the are being made available but at the same time
pacific islands. big investors are the key to it is extremely crucial and critical for every
where the money gets invested and if they were industry player to play its role in ensuring that
to take a call if their fiduciary responsibilities these overall key milestones are met because
make them do the right things it would prevent end of the day it's a real topic and it's no longer
and both mitigate as well as adapt and bring a topic which can be pushed for another decade
in resilience into their activities and make for the next generation of professionals who
the world a lot safer environment. So money would come into the picture.Talking about the
pipeline is very important and insurers are direct and indirect pressures to take action on
the key players. He opined the inclusion of climate risks he discussed the role of regulators,
sustainability in the IFRS as very important investors and community for disclosures. Banks
subject because if the pollution that we are must disclose the climate risks and incorporate
making is not perfectly measured the risk climate change in their risk management which
cannot be accurately priced which in turn finally needs to be reflected in their capital
would socialize the loss and privatize the allocation. The hidden exposures in their
profit. So if there is a climate event or there is portfolio needs to be evaluated by banks. For
an environmental event it will impact not just the banks, financial institutions and investors,
the running of the business it could impact it is understanding and awareness that comes
the board, the professionals involved in it as the first step and then comes measure and
and everyone gets drawn in. So the risks are manage for risk management. He mentioned in
spreading out it need not be country specific the slides a sample portfolio risk profile where
city specific it could impact cross-border it he explained the risk and the impact of climate
could also have inter-generational implications change on the exposure or the risks the banks
and what results from it is stranded assets. So and insurers are taking. As risk management
today if insurers, banks, financial institutions it is necessary to accept the risk but if it's an
invest in coal mines they invest in oil and unknown risk you have to get into potential
gas and tomorrow there is a dramatic shift in assessment and also look at what competitors
renewable energy space and because of that are doing just to gauge their position. He
dramatic shift if all these investments in oil gas echoed Mr. Praveen in saying that we have to
coal becomes redundant all that will have to build little community resilience around it so
be written off and that will be a big blow to the that at least the preparation and the planning
balance sheets of financial institutions and the is slightly better than what it can be. Talking
money pipeline. about risk transfer he said parametric coverage
to mitigate physical risk is easier and the only
Mr. Hitesh Kotak made a presentation and
difference between a parametric risk and a
discussed about the Paris Summit and the
Glasgow Summit. He discussed about the normal insurable risk is in parametric risk
changing perspectives of retail investors who the pay-out which is made is based on certain
triggers which could be a certain mercantile
are putting lot of emphasis on ESG index
of companies before investing. He briefly index of earthquake which is very similar
to Richter scale or cyclone intensity and the
introduced the concept of how insurance
industry is assessing this particular dimension distance of the land etc. and make sure that such

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