This online workshop, organised in partnership between Climate Governance Initiative (CGI) and Chapter Zero, will explore the rapidly evolving field of scenario analysis and planning and its critical implications for financial services Non-Executive Directors (NEDs), with a particular focus on those serving in banking, asset management and asset owner firms. 

Scenario analysis is becoming an essential tool for financial institutions to assess their resilience to future states of the world and meet regulatory requirements. Effective use of scenario analysis and planning provides a tool for addressing ever-evolving systemic risks and there is an increasing need for organisations to integrate this within strategic planning.  

The financial sector’s effective use of scenario analysis goes beyond the need to meet regulatory expectations (e.g. stress tests). Scenario analysis and planning can inform strategies for current and future-focussed financial and business operations. The Bank of England (PRA) is currently consulting on ‘Enhancing banks’ and insurers’ approaches to managing climate-related risk’, with a key focus on climate risk scenario analysis, with the requirement that Boards take over oversight to “ensure climate scenarios are linked to financial impacts over relevant time horizons.” The Network for Greening the Financial System recently published a conceptual note highlighting the interaction between climate scenario analysis and transition planning – a link also drawn out in a draft ISO Standard on Net Zero Transition Planning for Financial Institutions. Given this forward-looking strategic focus, it is therefore increasingly necessary for board directors of financial firms to ensure organisations have strong governance in place to oversee and scrutinise the use of scenario analysis and planning. 

By bringing together expert perspectives and practical, interactive exercises, this session will equip board directors of financial services firms to consider the specific corporate governance implications associated with scenario analysis and planning.