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Practical solutions to the challenges of climate change in the financial sector have been proposed by the FORGE Group of UK banks and insurance companies.

Managing Climate Change in Financial Services: A Guidance Framework is the latest guide by the informal FORGE group of financial firms to look at how key corporate functions such as strategy, risk and procurement and business lines such as retail banking, asset management and general insurance can meet the challenges presented by climate change.

Each chapter contains a list of practical actions for readers at six business levels: strategy, policy, procedures, management, monitoring, and reporting.

Practical implications 

Richard Cooper of Lloyds TSB and Chair of the FORGE Group explained that the guide deals with the facts and practical implications of the environmental challenge.

He added that the aim is to provide financial firms with the latest intelligence on how climate change issues could affect their business, and how they might meet these challenges.

Cooper said that the group did not expect that any organisation should implement each and every action point in this document. Each firm will have its own views on these issues, according to the group, not least on the potential costs and benefits.

“We do believe that climate change presents one of the biggest challenges to 21st century business, however, and that we have a key role in creating a genuinely low carbon economy,” Cooper added.

The FORGE Group members said that there is now broad international scientific consensus that man-made emissions of greenhouse gases are contributing to climate change.

They added that the economic costs of inaction far outweigh the costs of action and that combating climate change effectively requires action on a global scale, and from all levels of society.

The FORGE Group members acknowledged the strategic implications of climate change for the financial services sector, and said they accepted that the sector has a role to play in the transition to a low carbon economy.

Related links

• British Bankers’ Association
• Managing Climate Change in Financial Services: A Guidance Framework