BUILDING A RESILIENT ECONOMY THROUGH MEASURING CLIMATE TRANSITION RISKS EXPOSURES TO HIGH EMITTING SECTORS USING STRESS TEST ANALYSIS
22 September 2023
Climate Change has profound consequences on our lives and livelihood, exerting stress on both our natural and financial systems. Developing climate resilience and contributing to a sustainable future requires action today. Organizations that recognize this are seeking to better understand their climate risks and opportunities and the strategies they should pursue. Climate risk tools can assist in the decision-making process and by validating climate strategies and uncovering new insights about climate risk.
The prevalence of regulatory climate scenario assessments and climate stress tests is on the rise. This heightened demand has not only led to the development of specialized tools tailored for climate disclosures and scenario exercises but has also underscored the urgency of effective climate risk management.
Recognizing the critical importance of climate resilience and response by the financial sector, Bank Indonesia Institute, in collaboration with WWF-Indonesia and with support from WWF’s Greening Financial Regulation Initiative, WWF Philippines, and 1in1000, hosted a 3-day workshop from 19 to 22 September 2023 in Jakarta. The workshop aims to enhance knowledge in quantifying climate change impacts on the real economy sector as well as the financial sector to provide insights into the latest measures adopted by central banks and supervisors in managing these risks within their core mandates.
Key topics discussed in the workshop include, among others:
- Regulatory and supervisory development in climate stress test
- Climate and energy transition scenarios and portfolio alignment
- Climate physical risk integration into Banks’ risk metrics
- Data infrastructure of the climate risk stress test
- Insights from the pilot Climate Stress Test application
- Interpretation of results and possible integration into existing risk management approaches
- Biodiversity and nature-related risk analysis
A report on the findings of the economic resilient climate stress test in Indonesia will be published on Bank Indonesia website https://www.bi.go.id/en/publikasi/kajian/default.aspx
For more information, contact:
Rizkia Sari Yudawinata, Sustainable Finance Program Lead, WWF-Indonesia. Email at rjoedawinata@wwf.id
Contributors:
Bank Indonesia Institute (Arnita Rishanty, Retno Puspita K. Wicaksono)
WWF (Rizkia Sari Yudawinata, Siti Kholifatul Rizkiah, Rafi Aquary, Aurellia Puteri Arfita, Chrisandini, Ed Thongson, , Adam Ng)
1in1000 (Jakub Cervenka, Franziska Fischer, Jocob Thomae)
Note: For the news on the inaugural workshop “Natural Capital, Biodiversity and The Economy and How it Relates to the Financial System; and Climate/Nature Scenario Analysis and Stress Testing” jointly organized by Bank Indonesia Institute and WWF Indonesia on 20-22 June 2023, please view this link.
