Central Bank of Russia survey finds most financial institutions do not fully embed climate risks in risk management

The Central Bank of Russia published survey findings assessing compliance with its climate-risk recommendations, concluding that only a small share of financial institutions comprehensively incorporate risks linked to greenhouse gas emission reductions and climate change adaptation into their corporate risk management systems. Banks are more engaged on the climate agenda than non-governmental pension funds and insurance companies, with some already including relevant terms in loan agreements. Monitoring of major non-financial companies’ climate and environmental strategies indicates better climate-related disclosure and more ambitious targets, although environmental targets are often formal. With Russia’s trading partners continuing a shift toward a low-carbon economy and introducing regulation that will affect international trade, the central bank plans to detail methodologies for taking climate risks into account, develop further climate risk management recommendations for banks, continue climate risk stress testing, and encourage financial institutions to assess these risks independently.