Skip to main content
Entire section Custom print Text Only Rich Text Print

Principle 2 - Incorporation of climate-related financial risk exposures into overall business strategy

2.The board and senior management of a financial firm should consider material climate-related financial risk exposures when setting the organization’s overall business strategy.
 
2.1In developing and executing the financial firm’s overall strategic plan, the board and senior management should ensure that all risks including material climate-related financial risks and the ensuing opportunities are considered. Please refer to Principle 4 for considerations on materiality.
 
2.2Any climate-related strategies or objectives should align with and support the financial firm’s broader strategy, risk appetite, and risk management framework.
 
2.3It is recognised that the incorporation of material climate-related financial risks into various planning processes is evolving as measurement methodologies, models, and data for analysing these risks mature over time. The board and senior management should ensure that climate-related financial risks are documented and periodically reviewed. Any climate-related strategies or objectives should be continuously improved based on the lessons drawn from measuring, analysing and monitoring of these risks.