Bank of England issues climate crisis risk advice
The Bank of England has produced guides to help businesses survive the economic turmoil generated by the climate crisis.
The guides, published by the Climate Financial Risk Forum (CFRF), aims to help firms in all sectors combat climate-related financial risks caused by faltering crops, floods, and demographic change.
According to Morgan Stanley, climate-related disasters cost the world £470 billion from 2016-2018, and the UN Environment Programme estimates that the global cost of adapting to climate impacts is expected to grow to £101-217 billion per year by 2030 and £203-362 billion per year by 2050.
The CFRF is chaired jointly by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).
Nikhil Rathi, Chief Executive of the Financial Conduct Authority (FCA), said: “These guides will help firms overcome some of the difficulties they’ve faced.
“Importantly, they also focus on innovation, so financial firms can see the opportunities, as well as challenges, from more effective climate-related financial risk management.”
Research released in August revealed that exceeding critical “tipping points” in the climate system could lead to significant increases in the economic impacts of the global environmental crisis.
A research team led by academics at the Grantham institute at LSE used new models to estimate the economic fallout from major climate tipping points being breached, such as the disintegration of the Greenland ice sheet, the thawing of permafrost and dieback of the Amazon rainforest.
The research revealed that should any of these tipping points come to pass, their resultant impact would likely increase the economic cost of damages from the climate crisis by about 25 per cent compared to previous projections.
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