The growing frequency and intensity of climate-related disruptions have made stress testing a vital tool for financial institutions, regulators, and businesses seeking to strengthen resilience against environmental risks. The Stress Testing for Climate Shock Events Training Course provides participants with the knowledge and tools to assess the potential impact of climate shocks on credit portfolios, investment strategies, and institutional stability. By focusing on stress testing frameworks, scenario design, and climate risk integration, this program equips professionals to better navigate the uncertainties of climate change on financial and operational systems.

Through a blend of theoretical concepts, case studies, and practical exercises, participants will gain insights into how climate shock events can disrupt economic stability and how institutions can prepare for such risks. The course covers stress testing methodologies, climate risk indicators, scenario planning, and global regulatory expectations, ensuring learners leave with actionable strategies for safeguarding portfolios and aligning with sustainable finance principles.

Duration: 10 Days

Target Audience

• Risk managers and analysts
• Credit portfolio managers
• Financial regulators and supervisors
• Central bank and monetary policy officers
• Climate and sustainability officers
• Insurance and reinsurance professionals
• Investment analysts and fund managers
• Corporate governance professionals
• Environmental risk consultants
• Senior executives in financial institutions

Objectives

• Understand the role of stress testing in climate risk management
• Explore the types of climate shocks and their financial impacts
• Apply methodologies for stress testing climate-related risks
• Design and implement climate stress test scenarios
• Assess the resilience of credit and investment portfolios
• Integrate climate risk into overall enterprise risk frameworks
• Align stress testing practices with international regulations
• Identify early warning indicators for climate-related vulnerabilities
• Build climate risk dashboards for monitoring exposures
• Strengthen strategic decision-making through climate stress insights

Course Modules

Module 1: Introduction to Climate Stress Testing
• Definition and purpose of climate stress testing
• Key drivers of climate shock events
• Importance for financial institutions
• Global trends in climate-related risks
• Overview of stress testing frameworks

Module 2: Climate Shock Events and Financial Stability
• Physical risks vs. transition risks
• Impact of climate events on credit markets
• Systemic vulnerabilities in financial systems
• Case studies of climate-driven financial disruptions
• Long-term implications for economic resilience

Module 3: Regulatory Expectations for Climate Stress Testing
• Basel Committee guidance
• Central bank frameworks
• Climate-related financial disclosure requirements
• International regulatory examples
• Supervisory stress testing practices

Module 4: Scenario Design for Climate Stress Testing
• Principles of scenario analysis
• Developing severe but plausible climate scenarios
• Incorporating macroeconomic variables
• Scenario sensitivity testing
• Practical scenario development exercises

Module 5: Data Requirements for Climate Risk Analysis
• Key climate and financial datasets
• Sources of climate risk data
• Data challenges and limitations
• Integrating non-traditional data sources
• Data quality assurance techniques

Module 6: Methodologies for Climate Stress Testing
• Top-down vs. bottom-up approaches
• Sensitivity analysis methods
• Dynamic balance sheet approaches
• Integrated climate-economic modeling
• Benchmark methodologies

Module 7: Quantifying Physical Climate Risks
• Flood and storm impact modeling
• Wildfire risk assessment
• Heatwave and drought impacts
• Sectoral vulnerability analysis
• Insurance claims and cost modeling

Module 8: Transition Risk Assessment
• Policy and regulatory changes
• Technology adoption risks
• Carbon pricing implications
• Energy transition impacts
• Sector-specific transition vulnerabilities

Module 9: Climate Risk Indicators for Stress Testing
• Key risk metrics and ratios
• Portfolio exposure indicators
• Climate value-at-risk (CVaR)
• Early warning climate signals
• Integrating climate KPIs in dashboards

Module 10: Climate Stress Testing for Credit Portfolios
• Loan portfolio vulnerability assessments
• Sectoral lending stress tests
• Counterparty-level analysis
• Non-performing loan impacts
• Practical case applications

Module 11: Climate Stress Testing for Investments
• Stress testing equity portfolios
• Fixed income portfolio exposures
• Real estate and infrastructure vulnerabilities
• ESG integration in stress testing
• Assessing long-term investment risks

Module 12: Climate Stress Testing in Insurance and Reinsurance
• Modeling climate-driven insurance claims
• Reinsurance risk aggregation
• Catastrophe modeling applications
• Regulatory capital implications
• Designing insurance stress scenarios

Module 13: Technology Tools for Climate Stress Testing
• Climate analytics platforms
• AI and machine learning applications
• Geographic information systems (GIS) tools
• Scenario visualization dashboards
• Automation in stress testing processes

Module 14: Communication and Reporting of Climate Stress Results
• Preparing board-level reports
• Regulatory submission requirements
• Transparency in investor communication
• Benchmarking against industry peers
• Best practices in reporting

Module 15: Strategic Integration of Climate Stress Testing
• Embedding into enterprise risk management
• Supporting sustainable finance strategies
• Aligning with climate transition plans
• Using stress testing for capital planning
• Enhancing organizational resilience

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 10 working days before commencement of the training.