Strategic climate risk management

Strategic climate risk management

Addressing the financial risks posed by climate change

Proactively addressing climate risk for financial services firms

Climate risk management is not only a humanitarian imperative, but a business one, too. But how can financial services firms embrace a human-centered approach to managing the risk climate change brings to their businesses while capitalizing on the opportunity it presents?

Enhance sustainability with climate risk management for a higher bottom line

Climate change preparedness has quickly become a business imperative for financial services firms as stakeholders progressively demand accountable action. In the human-centered future of financial services, how a firm addresses issues of climate change will play a vital role in attracting and retaining customers and talent and driving growth. With increasing regulation and potential for systemic risk implications, how can you better assess the impact of climate change on your business while being a responsible corporate steward? Learn how strategic climate risk management can help you thrive in the economy of the future by identifying sustainable investment opportunities that elevate your bottom line while creating opportunities to make a positive impact on the communities in which you do business.

Our vision for a higher bottom line

The pandemic has brought into focus external, uncontrollable factors that can disrupt financial markets. As climate events could cause similar ripple effects, investors are taking note of the potential financial risks and creating momentum for industry and regulatory action. In this current environment, climate change preparedness is a critical consideration in defining an organization’s corporate social purpose. How organizations address climate risk management will redefine their brands, establish their reputations for years to come, and determine their future competitiveness.

With the future of financial services rapidly taking shape, firms must heed the call to embrace human-centered capitalism by engaging in more direct, personalized, meaningful, and socially responsible ways, leading to:

Centering around sustainability in financial services firms

Learn about actions financial firms can take now to develop more comprehensive and holistic climate programs—and the key role climate risk will likely play in the near future.

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Climate risk regulatory developments in financial services

Until recently, climate risk management has received significantly more interest from UK and EU financial institutions and regulators than from their US counterparts. Over the past several months, however, there has been a steady increase in US regulatory and supervisory activities to monitor climate risks and assess their impact on global financial stability, accompanied by growing awareness among leading US financial institutions.


The sustainability agenda will likely continue, accelerating change for financial services in the United States with a more proactive administration, Congress, and regulatory leadership. In this monthly report, we offer a closer look at some of the biggest regulatory trends reshaping climate risk management in financial services, both now and the coming decade.

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Explore insights to help navigate climate risk management

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Active ownership: A strategy to achieve net-zero goals
Learn how you can turn your investment influence into a powerful force for sustainability. Dive into the world of active ownership, where savvy investors can drive the transition to a lower-carbon economy.
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Purpose and DEI at Deloitte
At Deloitte, we lead with purpose and DEI to help enact positive change for our people and communities. By deepening our commitments to social impact, sustainability, equity, and trust, we’re helping to create a more prosperous and equitable society. That’s how we continue to make an impact that matters in the world we share.
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Sustainability survey findings: Uncovering ESG disclosure progress and challenges in four industries
Deloitte’s 2024 sustainability action report compiles ESG insights from its latest executive survey shedding light on the current ESG landscape, including data management, disclosures, and compliance, allowing companies to assess their sustainability progress and future plans.
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Business as unusual: ESG in banking
Recent state-level legislations challenge the integration of environmental and social risk management in financial institutions, posing risks to both business operations and community financing. How can banks adopt green finance practices that address these risks and stakeholder concerns for transparency? Discover four principles to guide your approach to ESG in finance.
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ESG Progress in the Financial Services Industry
The financial services industry’s 
(FSI) answer to ESG regulations 
and stakeholder demands
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ESG and the product operating model in finance
The financial sector has become a pivotal player for sustainable change in the global ecosystem—not only ethically, but as a strategic necessity. Discover how integrating environmental, social, and governance (ESG) into the product operating model can help with risk mitigation, resilience, and long-term value creation for sustainability in finance.
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Underwriting Earth: Nature-positive insurance
Insurers recognize the urgent need to address the implications of climate change and property insurance. However, the industry lags in its efforts to mitigate risk associated with the loss of biodiversity and natural resources. Explore five ways the industry can help protect natural capital through investment, product innovation, and increased engagement.
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Building an integrated approach to real estate sustainability
Bold steps real estate leaders can take to help accelerate the transition to a low-emission future.
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Climate change and home insurance: US insurers have been hit hard by severe weather-related claims
A sunnier profitability forecast may be possible—if personal property insurers partner with stakeholders to build resiliency and address climate-related risks head-on.
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Impacts of climate change elevate US commercial real estate insurance costs
The CRE market is expected to face rising premiums, especially in states most vulnerable to extreme weather. What can owners do to help protect themselves and their properties?
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Financing the green energy transition
Discover how finance can fuel innovation and help power a green energy transition while saving the world US$50 trillion on its journey to net zero.
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Bridging insurance gaps to prepare homeowners for emerging climate change risks
Deloitte's survey of homeowners in US states with high climate change risk reveals skyrocketing costs and widening gaps in insurance coverage.
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How does your company's ESG readiness measure up?
For both public and private companies, environmental, social, and governance (ESG) readiness is a unique and fast-evolving journey. Our ESG SelfAssess™ tool is here to advise you as you navigate yours.
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SEC climate disclosure: Considerations for insurers
On March 6, 2024, the SEC issued a final rule that requires climate-related disclosures in annual reports and registration statements. Although the rule is currently facing legal challenges and a partial stay has been imposed by the SEC to minimize regulatory uncertainty, there are specific nuances and implications for insurers that executives should consider. Below are insights based on the final rule as released.
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Pathways to decarbonization | The built environment
Despite its positive impact on society—driving job creation and supporting the infrastructure in which humans live and work—the global built environment value chain is responsible for more than 37% of global carbon emissions.
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The safeguarding of natural capital
Given the unique position of Indigenous peoples and local communities (IPLCs) as stewards of natural capital, explore how financial institutions have the power to play a significant role when it comes to not only supporting biodiversity and protecting nature, but preserving culture as well.
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SEC climate disclosure: considerations for banking institutions
On March 6, 2024, the SEC issued a final rule that requires climate-related disclosures in annual reports and registration statements. While in line with existing frameworks and guidance, it may take significant coordination to understand these connections and implications and to create a good compliance strategy. There are specific nuances and implications for banking institutions that executives should consider even as the rules face challenges in court.
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How can the enterprise earn investor trust through sustainability disclosures?
Deloitte and The Fletcher School at Tufts University embarked on a global study, executed between January and December 2023, to understand how companies can enhance investor trust in their sustainability disclosures.
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The link between supporting women caregivers and building the leadership pipeline in financial services organizations
A survey of managers and executives across US financial services firms reveals how flexibility and other engagement levers can positively impact women with caregiving responsibilities.
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Taking an ESG-infused approach to governance
The support for environmental, social, and governance (ESG) objectives across the global financial services industry is a well-intentioned and ambitious venture. But are those pledges and initiatives being adequately supported at an operational level, or are they at risk of falling through the cracks in favor of competing priorities?
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The net-zero nudge: Financial institutions’ pivotal role in climate transition planning
How do you meet your greenhouse gas emissions reduction targets when less than 1% of the emissions are under your direct control? With new tools, new methods of data analysis, and a new approach to net-zero finance, the financial services industry has the opportunity to do just that.
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The world needs carbon markets. Here’s how to make them work better
Carbon markets are an essential mechanism for accelerating global decarbonization, but stakeholders should collaborate to make them robust, transparent, and trustworthy.
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The FIO calls on states, NAIC to increase their climate-risk capabilities as it preps for more detailed market analysis
The report on climate-related issues and gaps in insurance supervision from the Federal Insurance Office (FIO), a division of the US Treasury Department sets forth a multitude of expectations for state insurance regulators and the National Association of Insurance Commissioners (NAIC) to meet the growing and urgent needs created by climate risk.
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The upside to being upstanding
The human rights imperative for banks
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Embedded insurance is poised for exponential growth
Carriers should assess new distribution partners sooner rather than later to capitalize on embedded finance opportunities.
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Reshaping the future of financial services

It’s a complex time for financial services, with many uncertainties still ahead. Amid it all, the bottom line is evolving. It’s no longer simply the sum of earnings and losses, the lone determinant of a business’s ability to succeed or fail, innovate or stagnate. It’s bridging the gap between the striving and the successful until there’s less inequality and more shared wealth.

Deloitte can help you navigate climate risk preparedness to drive a more human-centered future of financial services and ensure you’re adhering to new regulations and making smart investment decisions. Help your organization reach a higher bottom line, advance climate risk management, and accomplish its corporate social responsibility objective by exploring the full suite of our future of financial services insights:

Financial Services home

The financial services industry is at a pivotal moment. Among other forces, human dynamics are reshaping global business and society, transforming the economy to one no longer led by producers, but by consumers. In a future where firms’ success will be deeply intertwined with their social impact, Deloitte’s financial services industry specialists have the experience and insight to help forward-looking clients lead the way in a human-centered economy. Our comprehensive, integrated services and solutions span banking and capital markets, insurance, investment management, and real estate. Join us in adopting a more human-centered form of capitalism that elevates the bottom line of all stakeholders.

The Deloitte Center for Financial Services

The role of financial services in the economy and society is evolving. The Deloitte Center for Financial Services is dedicated to helping leaders succeed through these changes with data-rich, fact-based research that provides timely insights on the most pressing issues facing the industry.

Banking & Capital Markets

It won’t be enough to keep pace with the digital economy of the future. To truly realize its potential, you have to lead the way. Our Banking & Capital Markets specialists can help by working with you to anticipate challenges, as well as develop and implement strategies that address regulatory reform, technological complexity, competitive dynamics, and the shift toward a higher bottom line.

Insurance

How do you meet the always-evolving expectations of customers while improving profitability and balancing the demands of regulatory change? Deloitte can help you navigate the rapidly shifting landscape of a human-centered economy. Our multidisciplinary approach brings together specialists in actuarial, risk management, strategy, operations, technology, tax, and audit to do for you what you do for the people and businesses your company insures: give them a future they can feel good about.

Investment Management

A future where more people have broader access to opportunities for greater wealth. It’s the promise of human-centered capitalism, and our investment management industry professionals can help you rise to the occasion. Whether you are in private equity, hedge funds, or mutual funds, we can help.

Real Estate

Deloitte’s US real estate practice can help guide your business into the future of capitalism with a multidisciplinary approach that combines deep knowledge, insight, and a human-centered focus on transformation. We customize our services to fit the specific regional, national, and global needs of owners, operators, investment advisers, property managers, leasing operators, and occupiers. Our services include financial statement and internal control audits; accounting and reporting advisory; taxation; location strategy; finance transformation; and more.

Get in touch

Ricardo Martinez

Ricardo Martinez

Principal | Deloitte Risk & Financial Advisory

Contact us to learn more

 
 
 
 
 
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