KPMG+银行业ESG及气候风险压力测试（演讲PPT）.pdf

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1、1Document Classification:KPMG Strictly ConfidentialDocument Classification:KPMG Confidential 2022 KPMG Phoomchai Business Advisory Ltd.,a Thai limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private

2、English company limited by guarantee.All rights reserved.ESG&Climate Risk stress testing in Banking sectorWebinar:Thursday,17 November 2022,3:30pm to 4:30pmKPMG in ThailandSpeakersDr.Clemens WieckSenior Manager,Financial Services,ESG SpecialistKPMG in GermanyGanesan KolandeveluPartner,Climate Change

3、 and SustainabilityKPMG in ThailandAmnat RitdumrongkulDirector,Financial Risk Management AdvisoryKPMG in ThailandMartin KlaasSpecialist,ESG RiskKPMG in GermanyOverview of ESG in Banking SectorDirectional on Climate Risk in ThailandInsights into Climate Risk Stress Testing ModelQ&ATable of ContentsOv

4、erview of ESG in Banking Sector5Document Classification:KPMG Strictly ConfidentialDocument Classification:KPMG Confidential 2022 KPMG Phoomchai Business Advisory Ltd.,a Thai limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG I

5、nternational Limited,a private English company limited by guarantee.All rights reserved.Overview of ESG in Banking Sector Air and water pollution Sea level rise and drought Resource depletion Deforestation Land degradation Energy efficiency Reactions of legislator/regulator to promote sustainability

6、 or bans on unsustainable activities(e.g.CO2 tax)Structural changes in demand and supply for products,services and commodities Noncompliance with labour standards Inadequate payment of labour Human capital management(employee attraction,retention,training,education)Lack of assurance of industry safe

7、ty standards and health protection for employees Product safety and liability Data protection and privacy Human rights Board composition Compliance with regulatory standards Corruption or attempted bribery Executive remuneration Business ethics Risk management Lack of proper assurance of data protec

8、tion Greenwashing risksBanks are increasingly recognizing the breadth and depth of ESG within their own businesses and the impact they can have on society.Banks will be measured across all ESG metrics,but will have to prioritize different elements of ESG depending on their appetite and focus.Respons

9、ibility will be not just for their direct impact,but also for every part of their lending portfolio.EnvironmentalEnvironmentalSocialSocialGovernanceGovernanceSource:ESG risk in Banks,KPMG International,May 2021.6Document Classification:KPMG Strictly ConfidentialDocument Classification:KPMG Confident

10、ial 2022 KPMG Phoomchai Business Advisory Ltd.,a Thai limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Key areas of the bank prone to E

11、SG risksESG risks can affect the banks P&L and liquidity issue where ESG risks can affect the bank directly(e.g.storm damage to bank buildings),but also affect customers(change in sales opportunities,production disruptions,etc.)leading to,for example,higher loan defaults.Consideration of sustainabil

12、ity in the business strategy and the organizational setup/governance Adjustment of product and customer portfolio Identification/classification of sustainable assetsOffering of sustainable financing to customers Refinancing with sustainable instruments Consideration of ESG(risk)in pricing&risk manag

13、ement Consideration of ESG risks within the capital charge Inclusion of ESG criteria in the distribution process Reporting of own ESG risks and their impact to supervising authorities and stakeholders ESG Data ManagementSource:ESG risk in Banks,KPMG International7Document Classification:KPMG Strictl

14、y ConfidentialDocument Classification:KPMG Confidential 2022 KPMG Phoomchai Business Advisory Ltd.,a Thai limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.

15、All rights reserved.The challenges of the Banks to deal with ESGLack of understanding of what ESG meansESG responsibilities are becoming clearer and they require funders/lenders to consider material non-financial i.e.ESG factors;however,there is still a lack of understanding of what these non-financ

16、ial factors are and how to define materiality.Multiple ESG taxonomy,definitions and reporting criteria complicate understanding and priority of ESG matters.Working towards one system,one policyIssuesSummary observationsOpportunitiesLack of understanding of what ESG means Multiple ESG taxonomy,defini

17、tions and reporting criteria complicate understanding and priority of ESG matters.ESG responsibilities are becoming clearer and they require funders/lenders to consider material non-financial i.e.ESG factors;however,there is still a lack of understanding of what these non-financial factors are and h

18、ow to define materiality.More regulatory bodies and standard setters are working towards the common global definitions,corporate reporting standards and metrics.On November 3rd 2021 the IFRS Foundation announced that it would form a new International Sustainability Standards Board(ISSB),as well as t

19、he consolidation of the Climate Disclosure Standards Board into IFRS Foundation.Concerned ESG will lower returns/portfolio performance Many firms believe that their lending opportunities will be reduced if they follow an ESG strategy as exposure to non-ESG companies is reduced and new non-ESG opport

20、unities are screened out.There is a huge new lending opportunities and products to finance the ESG transition when traditional business lines have limited room for expansion and fierce competition.Uncertain how to implement ESG practices There are many challenges from the ESG data required to measur

21、e the current state and progress towards a firms goals through to the practical implementation of ESG policies throughout the lending process.Numerous ESG standards,framework and principles can help you get started to implement ESG practices and roadmap aligned with Banks long term strategy and goal

22、s.Lack of risk management/oversight capabilities Uncertainty exists as to how to identify long term ESG risks and how to measure and monitor them.Financials institutions can prevent themselves from ESG risk by embedding ESG assessment in every stage of risk management framework.Assurance and reporti

23、ng Stakeholders will look for assurance over ESG reporting to provide certainty and to mitigate the risk of greenwashing Increasing regulatory to disclose the ESG information as material non-financial,coupled with financial information.Public reporting and disclosure on ESG practices will increasing

24、ly be defined and aligned to global norms.Transparent and accurate reporting of ESG data/metrics will help the investor make informed decision to invest in sustainable and responsible business.Despite several challenges for the banks to deal with ESG,there are a wide range of opportunities associate

25、d with ESG such as new financing markets in the process,new products,sustainable investments and better risk management.Source:Transitioning to a Green Economy,KPMG playbook April 20228Document Classification:KPMG Strictly ConfidentialDocument Classification:KPMG Confidential 2022 KPMG Phoomchai Bus

26、iness Advisory Ltd.,a Thai limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.TCFD recommendations on more effective climate-related disc

27、losuresSource:Climate disclosure of the Bank in 2020 KPMG Global Banking Forum(Jun 2021)Recommended Disclosures:a.Boards oversight of climate-related risks and opportunitiesb.Managements role in assessing and managing risks and opportunitiesRecommended Disclosures:a.Risks and opportunities identifie

28、d in the short,medium,and long termb.Actual and potential impacts on the business,strategy,and financial planningc.Scenario analysis of impacts including a 2C scenarioRecommended Disclosures:a.Processes for identifying,assessing and managing climate-related risksb.Integration of climate-related risk

29、 into overall risk managementRecommended Disclosures:a.Metrics used to assess climate-related risks and opportunities b.All GHG emissions(Scopes 1,2 and 3)and related risksc.Targets and performance against those targetsGovernanceStrategyRisk managementMetrics and targetsDisclose governance around cl

30、imate-related risks and opportunitiesDisclose the actual and potential impacts of climate risks and opportunities on your business Disclose how you identify,assess,and manage climate-related risksDisclose the metrics and targets used to assess and manage climate risks and opportunities9Document Clas

31、sification:KPMG Strictly ConfidentialDocument Classification:KPMG Confidential 2022 KPMG Phoomchai Business Advisory Ltd.,a Thai limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English compan

32、y limited by guarantee.All rights reserved.The TCFD supplemental recommendations for banksThe organizations governance around climate-related risks and opportunitiesNo supplemental guidance for banksThe actual and potential impacts of climate-related risks and opportunities on the business,strategy

33、and financial planning.1.Significant concentrations of credit exposures to carbon-related assets;2.Disclosing climate-related risks(transition and physical)in lending and other financial intermediary business activitiesHow to identify,assess,and manage climate-related risks.1.Charactering climate-re

34、lated risks in the context of traditional banking industry risks(i.e.credit,market,liquidity and operational risks)2.Describing any risk classification framework used.The metrics and targets used to assess and manage relevant climate-related risks and opportunities.1.Provide the metrics used to asse

35、ss impact of climate-related risks on lending and other financial business activities(credit exposure,equity and debt holdings,or trading positions)broken down by:-Industry;-Geography;-Credit quality(e.g.investments or non-investment grade,internal rating system)-Average tenor.2.Provide amount and p

36、ercentage of carbon-related assets relative to total assets,Provide amount of lending and other financing connected with climate-related opportunitiesGovernanceStrategyRisk ManagementMetrics and TargetsBesides these 4 themes,TCFD also recommends the approach for scenario analysis to assess impact of

37、 climate-related risks,which the entities should use a 2oC or lower scenario in addition to two or three other ones that most relevant.10Document Classification:KPMG Strictly ConfidentialDocument Classification:KPMG Confidential 2022 KPMG Phoomchai Business Advisory Ltd.,a Thai limited liability com

38、pany and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Climate risk is financial risk For banks its a board-level issueSource:Climate disclosures within the Annua

39、l Financial Reports of Banks(Phase 1)by KPMG,April 2021.Note:1 The 25 banks selected for KPMGs benchmarking analysis consist of 5 major banks in the UK,5 banks in Europe,4 banks in Australia,5 banks in Canada and 6 banks in the US through 2020 Annual Financial Reports to shareholders(online glossy v

40、ersion).Todays bank boards are addressing climate change right at the top of their organizations,with more empowering their CEOs to take direct responsibility and including climate strategy targets in reward structures.Of the 25 banks reviewed,80%of the banks identified and disclosed metrics and tar

41、gets which are directly linked to achieving their climate strategy.Common metrics and targets disclosed by banks are as follow;72%of banks disclosed metrics and targets related to sustainable financing in their 2020 Annual Financial Reports.Sustainable financing refers to funding committed to projec

42、ts,businesses and products that provide environmental benefits.Banks are also targeting to make their operational emissions net zero by 2030(or earlier)with 68%of banks disclosing metrics and targets around carbon emissions and 56%around energy emissions.60%of banks disclosed set targets to reduce f

43、inanced emissions.Financed emissions are absolute green house gas(GHG)emissions that banks finance through their lending and investment activity with 24%of banks providing quantitative details of financed emissions.Some of the banks have committed to reducing their financing to sectors such as power

44、,energy and oil and gas,and a number of the banks(44%)have committed to a full phase-out of lending to specific carbon intensive sectors such as thermal coal.As there is currently no universally accepted framework or methodology for identifying and calculating climate-related metrics and targets,the

45、re is diversity in the scope of such metrics.72%Financial risk72%of banks disclosing climate risk as financial risk which will impact their business in the longer term68%Material or principle risk68%of banks disclosing climate risk as material or principle risk 20%Changes to risk assessment20%of ban

46、ks disclosing an increase in their risk assessment for climate risk KPMG conducted the survey on 25 major global banks disclosures on climate risk in the most recent financial reports show how climate change is becoming embedded in their business strategies.Of the banks that KPMG reviewed,72%Sustain

47、able financing 68%Operational emissions:(a)Carbon emissions56%(b)Energy consumption60%Financed emissions44%Thermal coal:24%Quantitative disclosures on financed emissions:Directional on Climate Risk in Thailand12Document Classification:KPMG Strictly ConfidentialDocument Classification:KPMG Confidenti

48、al 2022 KPMG Phoomchai Business Advisory Ltd.,a Thai limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Climate RisksClimate change is de

49、emed as the gravest threat to humanity and as the risk with potential to inflict the most damage at a global scale over the next decades.Companies face climate-related financial risksdue to the effects of climate change(physical risks)and transition towards a net-zero economy(transition risks).Chall

50、enges exist to traditional risk managementowing to distinct nature of climate risks such as long time horizons,high uncertainty about policy and socio-economic factors,and heterogeneity.Scenario analysis(stress testing)along with climate-risk disclosures under TCFDare key to overcome these challenge