The CERM Sandbox enables banks to better understand and manage climate risks in lending portfolios

IN BRIEF:

The new platform offers an interactive and immersive experience for banks to understand and manage climate risks in a simple and accessible manner

The climate risk management framework comprises two main components: physical and transition risks

By integrating this into the existing capital framework, the solution extends the current credit risk model used by banks, providing a comprehensive approach for identifying long-term, global, and evolving climate risks and enabling more accurate calculations of potential losses

What does this mean?

"By launching the CERM Sandbox, we aim to provide the finance industry with a comprehensive approach to understanding and managing climate-related financial risks at the highest level,” said Olivier Vinciguerra, Chair of Green RWA. “This is a huge achievement, in line with Green RWA's goal to support energy transition financing, and I want to thank Finastra for its support on that journey."