Aren't climate risks ultimately reputational risks?

ESG
Q+
30/11/2022 Article
profile picture of Florian Marsaud

Florian Marsaud

BPCE

Director of Governance and Risk Control

Florian Marsaud is Associate Professor at IAE Paris Sorbonne, Director of Governance and Risk Control at BPCE Group and member of the CRSF. In this article, he examines the link between climate risk and reputation risk.


Is it right for financial institutions to talk about ‘climate risks’? In fact, are they risks as such, i.e. that would have an existence (content, management, remediation) sui generis? 

Are they risks like any other – like credit risks, financial risks or non-financial risks – or do they feed on other risks that exist outside and beyond those already mapped and managed?

It is probably better to talk about risk factors. 

We could say that those working in the second line of defense with regard to climate issues will have fully succeeded in their mission to manage (map, set quotas, monitor, and ultimately control) these risk factors when such factors are fully integrated and managed through the other banking and/or financial risks.

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