Consultants Mercer and Oliver Wyman selected to advise UNEP FI banking climate risk project

Project builds on TCFD recommendations

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Consulting firms Mercer and Oliver Wyman have been selected as expert advisors to a new banking and climate risk project being run by the United Nations Environment Programme – Finance Initiative.

The project, which was announced last October, is being run by UNEP FI and a working group of 16 banks.

Representing over $7trn, the TCFD pilot group included the following UNEP FI banking members: ANZ, Barclays, Bradesco, Citi, Itaú, National Australia Bank, Royal Bank of Canada, Santander, Standard Chartered, TD Bank Group and UBS.

Other banks that joined later included Norway’s DNB, the Netherlands’ Rabobank, Spain’s BBVA and France’s BNP Paribas and Société Générale.

The working group was set up in June following the final recommendations from the Task Force on Climate-related Financial Disclosures (TCFD), the high-level body created by the Financial Stability Board.

The two consulting firms – both part of the wider Marsh & McLennan group – will develop common analytical tools including scenarios, methodologies and metrics to enable banks to strengthen their assessment and disclosure of climate-related risks and opportunities.They will focus on transition risks associated with different scenarios for decarbonizing the economy. Acclimatise, the UK advisory firm, is also involved in the project; it will be responsible for the elements related to physical risks.

“This project fits the bill.”

“The translation of climate risk factors into prospective financial performance is less well understood than more traditional risk types in financial services,” said Oliver Wyman partner John Colas.

“The Task Force’s vision was to encourage collaboration and consistency in approach,” said Jane Ambachtsheer, Mercer’s Global Head of Responsible Investment and a member of the TCFD. “This project fits the bill.”

Mercer is known for its Investing in a Time of Climate Change report in 2015 and the Climate Change Scenarios: Implications for Strategic Asset Allocation in 2011. Sister firm Oliver Wyman, the management consultant, has a sustainability center here.