14. Institutions should develop forward-looking approaches and perform scenario analyses to manage …

Institutions should develop forward-looking approaches and perform scenario analyses to manage environmental risks and inform strategic decisions. More specifically:

• a. Institutions should use scenario analysis for the purposes of identifying business risks and opportunities, assessing the vulnerabilities of their portfolios to physical and transition risks, and testing their resilience to potential negative impacts of environmental factors, starting with climate change.
• b. Institutions should use scenario analysis to support the development of their strategy and transition planning process as set out in the EBA Guidelines on the management of ESG risks and challenge their business model in terms of resilience to environmental factors, including in the long-term horizon.
• c. Institutions may also use scenario analysis to raise awareness and support embedding environmental risks in their corporate culture.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/