Macro Learnings about Climate-related Credit Losses

Macro Learnings about Climate-related Credit Losses

Tony Hughes

Climate risk modeller

In this video collaboration with MMF and Grant Thornton, risk modeller and data scientist Tony Hughes outlines the impact of climate change on the financial system. More specifically, why climate change has had a limited impact on the financial system so far.

In this video collaboration with MMF and Grant Thornton, risk modeller and data scientist Tony Hughes outlines the impact of climate change on the financial system. More specifically, why climate change has had a limited impact on the financial system so far.

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Macro Learnings about Climate-related Credit Losses

9 mins 10 secs

Overview

Despite 50 years or more of global warming, it has been found that climate change has had a limited impact on the financial system. The ECB undertook a climate stress test in parallel to the bank of England's Climate Biennial Exploratory Scenario (CBES) test and they found that corporate probability of default levels would rise by only 7% under a no-action scenario (hothouse world scenario).

Key learning objectives:

  • Analyse the current and projected impact of climate change on the financial system

  • Explore the macro-level evidence for the impact of climate change on the financial system

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Summary
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Expert
Tony Hughes

Tony Hughes

Dr Tony Hughes is an expert risk modeller and data scientist at Grant Thornton. Tony has over 20 years of experience in industry and academia. Before he joined Grant Thornton he worked as a senior quantitative modeller at Moody’s Analytics for over two decades. At Moody’s, Tony developed market risk models and structural macroeconomic models for use in simulation and scenario development. Tony’s key focus is in climate modelling and ESG, which Tony described as the “greatest quantitative challenge the industry has faced for many decades”.

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