Having now published the results of its Climate Biennial Exploratory Scenario (CBES), looking at the financial risks posed by climate change for the largest banks and insurers operating in the UK, the Bank of England believes that over-time climate risks could become a persistent drag on earnings.
While projections of climate losses are uncertain, notable data gaps exist, the analysis and modelling is still in its infancy and UK banks and insurers have much more to do to understand their exposure to climate risks, the results suggest that, without action, climate risk will significantly drag down profits and ultimately the economy if unchecked.
