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Laxman Pai, Opalesque Asia:

Banks and other financial institutions are focusing more on climate-risk management but several barriers remain, said a survey.

According to a new global survey conducted by the Global Association of Risk Professionals (GARP), 90% of firms have board-level governance of climate-related risks and opportunities, up from 81% in 2019, but only 30% feel their firm's strategies are resilient against climate change beyond 5 years.

GARP's second annual Global Benchmarking Survey included 71 leading banks, asset managers, insurers and other firms with a total market capitalization of $3.8 trillion.

The survey found that several barriers and challenges exist in addressing climate risk within financial services. In the short term, the biggest concern for most firms is the lack of reliable models for climate risk, followed by regulatory uncertainty, as regulators have begun to set formal expectations for firms' practices in this area.

Scenario analysis is an important and valuable tool firm can utilize in developing climate-change strategies, but only a small fraction (14%) of the firms surveyed are using scenario analysis regularly, and of those who have used it at all, only 54% have acted based on the results of the analysis.

The overwhelming majority of respondents think that climate risk has only been either partially priced or totally omitted from the market's pricing of products. Pricing difficulties cited include the complexity of ......................

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