Page 26 - Risk Management Bulletin January-June 2023

RMAI BULLETIN JANUARY - JUNE 2023

(ii) Strategy - Disclose the actual and potential impacts of climate-related risks and
opportunities on the organisation’s businesses, strategy, and financial planning where such
information is material.
Recommended Disclosure Illustrative Examples
a) Describe the climate-related risks REs may disclose:
and opportunities the organisation • Relevant short, medium and long-term time horizons, as
has identified over the short, considered and determined by it, regarding the useful life of
medium, and long term. assets
b) Describe the impact of climate- • Specific climate-related issues identified for each time horizon
related risks and opportunities on (short, medium, and long term) that can have a material
the organisation’s businesses, financial impact (in terms of business lines, revenue, costs,
strategy and financial planning. balance sheet assets)
c) Describe the resilience of the • The materiality assessment process undertaken by it, e.g.,
organisation’s strategy, taking process and methodology used to identify the impacts of
into consideration different climate-related risks and opportunities
climate-related scenarios, • Any scenario analysis conducted, such as the scenario,
including a 2°C or lower scenario. assumptions, methodology, coverage of business lines and
portfolios
• Results of scenario analysis conducted and any implications on
its strategy
(iii) Risk management - Disclose how the organisation identifies, assesses and manages
climate-related risks.
Recommended Disclosure Illustrative Examples
a) Describe the organisation’s REs may disclose:
processes for identifying and • Key processes for identifying and assessing climate risks
assessing climate-related risks. • Methods or techniques in measuring, monitoring and
b) Describe the organisation’s mitigating climate risks (e.g., relevant models)
processes for managing climate • Identification of significant concentration of credit exposure to
related risks. carbon-related assets
c) Describe how processes for • Description of significant climate-related risks (physical and
identifying, assessing, and transition) in business activities
managing climate-related risks • Definitions of risk terminology used or references to existing
are integrated into the risk classification framework
organisation’s overall risk • REs may consider characterizing their climaterelated risks in the
management. context of traditional risk categories such as credit risk, market
risk, liquidity risk, and operational risk
• Progress being made in enhancing risk management
capabilities and incorporation of climate risk into existing risk
management framework

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