The BoE is undertaking an assessment of the key risks of climate change in the CBES. The risks are the "transition risk" - being the structural changes required to the economy to effect net zero emissions and the "physical risk" - being the increase in global temperatures. The CBES seek to test the financial and insurance markets so that BoE can better understand the climate change risks and the interaction with the financial system. This is simply a research tool at this stage but it will be interesting to follow this closely. Most importantly once that data is captured and the consequential actions proposed, what the cost will be to those institutions of implementation.
The Bank of England (Bank) has today published the Climate Biennial Exploratory Scenario (CBES) to explore the financial risks posed by climate change for the largest UK banks and insurers (participants).