However, very few banks back then had actually begun to implement these practices and we made them aware of this gap with regards to our supervisory expectations. As part of this year’s thematic review on climate-related and environmental risks, we followed up on these points, focusing on banks’ assessments of the materiality of environmental risks and on their risk management frameworks.
Our preliminary results show that many banks have by now made an initial assessment of their environmental risk exposures. We also see that banks are using the “climate risk playbook” to develop their approach to environmental risk. They map out physical and transition risk drivers and typically start by excluding some activities to avoid financing those that have an excessive environmental impact.