Banks Asked To Align Compensation

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    A group of 80 institutional investors is calling on banks worldwide to align executive compensation with long-term climate risk goals as part of a series of recommendations on integrating climate risks into banking activities, says the report ‘Are Banks Prepared for Climate Change?’. Of the 61 banks analyzed, few conduct climate stress tests. The analysis by Boston Common Asset Management, supported by the other investors in the group, found “many banks had not incorporated climate-specific considerations into their risk management practices, nor had they developed long-term climate strategies.” The group wants banks to accurately analyze risk levels in their lending models and develop strategic management plans that consider the implications of climate change in credit and risk assessments.” The investor group also called for the oversight of boards of the banking companies to integrate climate change into their decision-making process.