How well do you understand the impact of climate change on risk management? Exploration and advancement of climate risk analytics for the building society sector.

Paul Broadhead, Head of Mortgage and Housing Policy, BSA (Chair)

Iain Clacher, Professor of Pensions & Finance, University of Leeds

Professor Jason Lowe OBE, Head of Climate Services for Government, Met Office and Chair in Interdisciplinary Climate Research, Priestley Centre, University of Leeds

Chair Paul Broadhead began the session by introducing a collaboration between the BSA and the UK Centre for Greening Finance (CGFI). The CGFI was established to accelerate the adoption and use of climate and environmental data and analytics by financial institutions internationally. Through the partnership the Centre hopes to begin to understand the risks and challenges the financial sector faces which is essential for our members – for both the business and membership.  

The purpose of the partnership is to enhance awareness amongst BSA members of climate risk, build the capacity needed to assess and quantify that risk and to facilitate collaboration amongst members, policymakers and stakeholders.

Professor Iain Clacher outlined the potential impact on the economy of climate change and how collaboration is vital to understand the scale of the issue and develop solutions.  He told delegates how the CGFI aims to translate climate science into the financial sector and that working together will be useful to institutions, building resilience in the economy. This is a global issue which the UK can capitalise on.

Professor Jason Lowe OBE highlighted how climate science used to be about defining the problem but is now concerned with providing solutions. He outlined what the data is showing about climate change: 

  • Global temperatures have risen by ~1.25 degrees. 

  • 2023 was the warmest year on record and the 10th year in succession that has equalled or exceeded 1.0 degree above the pre-industrial period. 

  • Change is happening now.

  • The UK focused data set of predictions gives a set of guidance to look at physical risk and shows a greater risk of warmer, wetter winters and hotter summers. This will be experienced everywhere in UK but not evenly. 

The session moved to small-group discussions to understand the challenges and opportunities faced by the sector in incorporating climate risk analytics into decision-making.