Risk Management Show Integrating Climate Risk into your core risk management processes with Matt McGlinchey
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Jan 20, 2025 Matt McGlinchey, Senior Climate Product Manager at Morningstar Sustainalytics, dives into the urgent integration of climate risk within financial institutions. He discusses key drivers for this shift, particularly in light of extreme weather events and the $1.5 trillion financing gap in developing countries. The conversation reveals the importance of accurate climate data and how it shapes corporate strategies and investor priorities. McGlinchey also clarifies common misconceptions in climate risk assessment and emphasizes greater awareness among investors.
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Climate Risk Integration Drivers
- Climate change and extreme weather events drive financial institutions to integrate climate risk management.
- Increased data and regulatory pressure further accelerate this movement.
Transition Risk Strategies
- Excluding high-emitting sectors is insufficient; focus on climate leaders.
- Orsted transformed from coal-intensive to sustainable energy company.
Effective Climate Strategies
- Invest in companies with credible decarbonization plans and ambitious targets.
- Assess implied temperature rise, value at risk, and company actions.