Another important requirement is integrating risk with business strategy and compensation. Risk – and return on risk – need to be core component of any performance measure, and should be explicitly factored into incentive and  6  6  Group of Thirty, “Toward Effective Governance of Financial Institutions”  BIS central bankers’ speeches  compensation schemes.
19 This residual uncertainty should not stand in the way of making prudent investments in risk-management practices in the near term to strengthen the financial sector against climate-related risks.