Updating and upgrading the application for the estimation of climate risk of the Piraeus Bank: Improvement of the management of the regulatory risk

Costumer’s Request

Piraeus Bank works on identifying and quantifying the risks and financial impacts of climate change on its clients and the Greek economy.

More specifically:

Identifying aspects of climate change and prioritising risks and opportunities to be managed by Piraeus Bank.

Quantifying climate change risks and opportunities, and valorising climate adaptation solutions for companies.

Developing climate risk and climate adaptation management mechanisms and integrating them into credit risk and business planning banking systems – i.e. integrating the climate factor into the client evaluation procedure of Piraeus Bank.

Our Solution

Our Team worked on identifying the impact of and business opportunities resulting from climate change in Greece and the surrounding region of Europe.

We developed innovative tools (climate change risk assessment models) to estimate in monetary terms the costs of climate change for businesses and the necessary investment costs of adaptation.

Through the tools developed, bank employees have offered free consultation to more than 4,500 companies across Greece, and more than 4,300 companies have invested in climate adaptation solutions.

A major success of the project was the development of the Climate Risk Quantification Model. This model estimates in quantitative terms the climate change risks associated with specific economic sectors, ‘sub-sectors’ and companies due to existing or future regulations on climate change and the direct financial losses or gains attributable to increased temperature, drought, precipitation, extreme weather events and other parameters associated with climate change. The climate risk is broken down into physical climate risk, direct regulatory climate risk and indirect regulatory. We currently work on updating the model to include transition risks.

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