Template-Type: ReDIF-Article 1.0

Author-Name: Pal Peter Kolozsi
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: kolozsip@mnb.hu
Author-Person: pko336

Author-Name: Sandor Ladanyi
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: ladanyis@mnb.hu

Author-Name: Andras Straubinger
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: straubingera@mnb.hu


Title: Measuring the Climate Risk Exposure of Financial Assets - Methodological Challenges and Central Bank Practices

Abstract: In order to understand climate-related risks and opportunities, the availability and
transparency of reliable financial information is essential. In this regard, the financial
sector plays a special role owing to its ties to other economic sectors, and the
exposure of financial institutions highlights the responsibility of central banks. This
paper uses the literature related to environmental sustainability reporting as well as
practical experience to describe the challenges encountered in assessing the green
risks of financial assets (absence and heterogeneity of data, differences in definitions
and requirements, lack of a uniform methodology, limits of rating schemes) and
also details the climate risk measurement methodologies and practical solutions
employed by central banks publishing their own climate-related financial disclosures,
i.e. the Bank of England, the Banque de France and the Magyar Nemzeti Bank.

Classification-JEL: Q51, Q54, G32, E58
Keywords: climate change, transparency, TCFD recommendations, financial disclosure
Pages: 113-140
Volume: 21
Issue: 1
Year: 2022
File-URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-21-1-ove1-kolozsi-ladanyi-straubinger.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:21:y:2022:i:1:p:113-140