Climate change poses a significant and growing threat to financial stability, creating a new class of physical and transition risks that central banks and financial institutions must understand and manage. This training course offers a strategic deep dive into the evolving landscape of climate-related financial risk, exploring the analytical frameworks, policy tools, and supervisory expectations central banks are developing to address this challenge. It is designed for professionals who need to navigate the complexities of integrating climate considerations into financial policymaking and risk management practices, ensuring the long-term resilience of the financial system.

This intensive five-day program will provide a comprehensive overview of the theoretical concepts and practical applications of climate risk analysis. Participants will gain hands-on knowledge of emerging methodologies for measuring climate-related financial exposures, the development of climate-related stress tests, and the strategic considerations for greening monetary policy and financial supervision. Through a combination of case studies and expert-led discussions, attendees will leave equipped to lead their institutions in building robust frameworks that can withstand future climate-related shocks and support the transition to a sustainable economy.

Duration: 5 days

Target Audience:

• Central bank financial stability and monetary policy staff
• Financial regulators and supervisors
• Risk managers and chief risk officers in financial institutions
• Investment managers and ESG analysts
• Government officials in finance and environment ministries
• Economists and researchers focused on climate change
• Compliance officers and internal auditors
• Policy advisors at international financial institutions
• ESG and sustainability professionals
• Executives responsible for strategic planning

Objectives:

• Grasp the concepts of physical, transition, and liability climate risks
• Analyze the transmission channels of climate risk to the financial system
• Understand the role and mandate of central banks in addressing climate risk
• Develop a framework for assessing climate-related financial exposures
• Evaluate the use of climate-related stress tests and scenario analysis
• Formulate policy responses for integrating climate risk into supervision and regulation
• Interpret the implications of climate risk for monetary policy and financial stability
• Examine the role of data, disclosure, and green taxonomy in climate risk management
• Assess international cooperation and the evolution of global standards

Course Modules: Module 1: Foundations of Climate-Related Financial Risk

• The distinction between physical and transition risks
• Understanding the transmission channels to the financial system
• The role of climate science and economic modeling
• Liability risks and their implications
• The economic impact of climate change

Module 2: The Central Bank's Role and Mandate

• Interpreting the mandate of central banks in the context of climate change
• The legal and institutional considerations for action
• The network for Greening the Financial System (NGFS) and its role
• The debate on central bank neutrality and policy activism
• The central bank as a data provider and analytical leader

Module 3: Measuring and Managing Climate-Related Risk

• Methodologies for measuring physical risk exposure
• Assessing transition risk and stranded assets
• The development of climate-related risk taxonomies
• Integrating climate risk into financial institution risk management
• The use of forward-looking metrics and indicators

Module 4: Climate Stress Testing and Scenario Analysis

• Designing and implementing climate-related stress tests
• Developing a range of plausible climate scenarios
• The application of stress test results for policy and supervision
• Comparing methodologies from different central banks
• Challenges in data availability and modeling

Module 5: Climate in Financial Supervision and Regulation

• Integrating climate risk into existing supervisory frameworks
• The role of Pillar 1, 2, and 3 in Basel III
• Developing supervisory expectations and guidance
• The regulation of climate-related financial disclosures
• The role of the central bank in promoting green finance

Module 6: Monetary Policy and Climate Change

• The impact of climate risk on monetary policy transmission
• The role of central banks in greening bond markets
• The use of monetary policy tools to address climate risk
• The impact on inflation, economic growth, and employment
• Debates on central bank asset purchase programs

Module 7: Data, Disclosure, and Green Taxonomy

• The importance of robust, high-quality climate-related data
• The role of climate-related financial disclosures (TCFD)
• Developing national and international green taxonomies
• Challenges in data collection and standardization
• The role of central banks in improving market transparency

Module 8: International Cooperation and Global Standards

• The role of international bodies like the FSB and BIS
• Cross-border coordination on supervisory frameworks
• The evolution of global standards for climate risk management
• The role of multilateral institutions in supporting emerging economies
• Harmonizing disclosure and reporting requirements

Module 9: The Future of Central Banking and Climate Risk

• The path to net-zero and the role of central banks
• The impact of carbon pricing and environmental policies
• The challenges of managing a just transition
• The role of central banks in funding climate-related innovation
• The long-term implications for financial stability and economic 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 7 working days before commencement of the training.