Banks are under growing pressure to make climate stress-testing a core part of their risk management. According to UNEP FI, these tests differ from traditional ones: they span decades and assess both physical and transition risks. The organization highlights four priorities — leadership engagement, climate-specific data, credible modelling, and integration of results into business strategy.
Yet many institutions are lagging. The European Central Bank reports that 60 % of euro-area banks still lack full climate stress-testing frameworks, and only one in five includes climate risks in credit models.
Regulators are sending a clear message: climate resilience is no longer optional. Banks that act early will better manage exposure, protect reputation, and gain an edge in the low-carbon transition.