Climate Compliance

  • Loan Book Carbon Footprint Assessments
  • Bespoke Measurement, Mitigation, and Monitoring package
  • Helping ensure compliance with the Central Bank of Ireland Climate Requirements

Context of service

Last November, the Central Bank of Ireland issued a letter from Governor Gabriel Makhlouf on its “Supervisory Expectations of Regulated Firms regarding Climate and other ESG Issues”. Since then, the Central Bank have established a Climate Risk and Sustainable Finance Forum, which is chaired by Deputy Governor Sharon Donnery. Recently, Deputy Governor Donnery has detailed that through the Central Bank supervisory activities, they will continue to assess progress on:

  • appropriate governance structures, business strategy and risk management processes, and
  • the follow through of real and measurable actions and accountability.

Climate Accountability can help ensure that your Credit Union is compliant with the Central Banks climate requirements, through a bespoke four modular process.

Outline of service

The service is delivered over 4 modules, completed over a 12-to-18-month period. After this initial period, it is envisaged that there would then be an annual CO2 emissions calculation and review of mitigation measures, risk management and action plan.

Module 1: Measurement

  • Carbon emissions statement in line with PCAF: The Global GHG Accounting and Reporting Standard for the Financial Industry
  • Bespoke loan book carbon footprint analysis
  • Peer comparison analysis

Module 2: Mitigation

  • On-site visit to assess mitigation measures in place
  • Production of a list of mitigation actions
  • Quantification of mitigation actions and basic Return on Investment calculations

Module 3: Risk management

  • Scenario analysis, risk analysis and tolerance setting.
  • Assessment of business opportunities.
  • Advice and presentation to Board on Governance and supervisory requirements

Module 4: Action Plan

  • Agreed mitigation measures and timeframe
  • Production of multi-annual action plan and part of the Credit Unions Strategic Planning process
  • Action plans will reflect the Central Bank of Irelands most recent guidance

Annual Monitoring

  • Annual Carbon statement review
  • Review of Action plan and implementation of mitigations
  • Updates to the Loan Book analysis algorithm

How we assist compliance with the CBI supervisory requirements on climate change

Develop the Board’s Business Strategy
Implement programmes to demonstrate commitment to climate issues Provide specialist expertise
Determine your Risk Profile in relation to the impact of climate change

Strategy & Business Model Risk
Provide robust business modelling analysis to determine the impacts of climate risks
Potential new products and services

Risk Management Framework
Assess the effectiveness of your control functions and internal controls Assess the risk appetite
Enhance Risk Management Frameworks with effective measurement, monitoring and mitigation

Scenario Analysis
scenario analysis and stress testing Materiality ofclimate risks
Analysis of differing paths to a carbon neutral future Help prepare for the downside risks of climate change

Produce a statement for your organisation’s adherence to proper disclosure requirements