46. When incorporating environmental variables into their existing stress testing framework …

When incorporating environmental variables into their existing stress testing framework, institutions should conduct a thorough gap analysis of their stress testing models to identify areas where current modelling capabilities need to be improved to adequately account for environmental risks. Given that environmental risks are not primarily captured by economic variables, institutions should consider an in-depth overhaul of their approaches, rather than multiple ad-hoc adjustments.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

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