Climate, Nature and Credit Risk: Challenges for the UK Banking Sector

Join us for an engaging session run by University of Edinburgh Business School's Nature Finance Lab in collaboration with the Credit Research Centre and the Bank of England.

As climate change and nature-related risks move from emerging concern to material financial reality, lenders across the UK are grappling with how environmental vulnerability translates into credit exposure. Hosted in partnership with the Bank of England, this event brings leaders from across the banking sector to examine the growing impact of climate and nature-related risks on credit portfolios, spanning residential mortgages, SME lending, and corporate finance. 

Whether through the physical risks of flooding and subsidence affecting household borrowers, the operational dependencies of small businesses on stable ecosystems, or the supply chain vulnerabilities embedded in large corporate exposures, the session will explore how nature and climate are becoming inseparable from sound credit underwriting.

Against the backdrop of evolving supervisory expectations from the Bank of England and increasing alignment with the Taskforce on Nature-related Financial Disclosures (TNFD), this event offers an opportunity for a dialogue between practitioners and policymakers on what risk management looks like in practice. Discussions will span data availability, the incorporation of nature-related dependencies and impacts into credit assessment, and the challenges of developing consistent methodologies across asset classes. 

Attendees will come away with a greater understanding of some of the challenges in integrating environmental factors into credit exposure across a broad spectrum of the financial industry in the UK. 

We are grateful for the support provided by Edinburgh Innovations and the Credit Research Centre to help run this event.

Agenda

14:00-14:10: Introduction & scene setting - Raffaella Calabrese (Personal Chair of Data Science, University of Edinburgh Business School & Nature Finance Lab)

14:10-14:40: Product innovation in the UK mortgage market: the case of green mortgages - Benjamin Guin & interactions between biodiversity and default risk in the UK mortgage market - Mahmoud Fatouh (Bank of England)

14:40-15:00: How banks can identify, source, and act on climate and nature risk data — from market demand to practical deployment - Scott Harrison (Experian)

15:00-15:15: Refreshment & networking break

15:15-15:35: Overview of the Taskforce for Nature Based Disclosures (TNFD) and emerging themes in the sector - Douglas Phillips (Arup)

15:35-15:50: Advancing climate risk models to capture nature risk - Christopher Sterley (True North Partners)

15:50-16:05: Wildfires, Weather, Mortgage Defaults, and Capital: A Spatio-Temporal Framework with Implications for Nature-Related Risk- Viani Djeundje Biatat (Credit Research Centre)

16:05-16:15: Refreshment & networking break

16:15-16:45: Panel discussion

16:45-16:55: Summary & close - Peter Baker (Edinburgh Innovations)

17:00-18:00: Networking drinks

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