Rising tides: Climate risk stress tests and its implications for banks across Southeast Asia

Climate risk is expected to be a mainstay of future stress testing exercises among banks, amidst the growing awareness of environmental, social and governance (ESG) issues and the need for environmental assessments in risk management. Regulators across Southeast Asia have yet to define the scope, parameters and methodology components of climate risk stress tests, however the European Central Bank's Climate Risk Stress Test (CST) presents an opportunity for banks to benchmark themselves against industry best practices in relation to climate risk stress tests and emissions data coverage.

This publication (part of PwC's Risk and Regulatory Outlook 2022 series) explores what these developments mean for banks in Southeast Asia and serves as a call to action on adapting existing stress testing capabilities to meet the demands for data and credit risk modelling. It also highlights how banks can better position themselves to address the challenges of climate risk stress tests, as well as some practical steps they can take to set up a climate risk stress test production run.

Download (PDF) Risk and Regulatory Outlook 2022

Required fields are marked with an asterisk(*)

First Name*

Last Name*

Email*

Telephone Number*

Organisation*

Job Title*

Specific details about your inquiry*

By submitting your email address, you acknowledge that you have read the Privacy Statement and that you consent to our processing data in accordance with the Privacy Statement (including international transfers). If you change your mind at any time about wishing to receive the information from us, you can send us an email message using the Contact Us page.