A Climate & Environmental Risk Assessment Guide was issued to Risk Advisory Service subscribers in Dec 2023 following the Central Bank of Ireland’s letter to credit unions on 30th November 2023. This guide was issued to support Risk Management Officers at the early stages of their climate and environmental risk mitigation journey and provide reassurance to those further along their respective paths that they are heading in the right direction. The guide can also serve as a gap analysis for those who already have a well-developed and comprehensive climate and environmental risk programme in place but who may be looking to identify areas for further enhancement.
Assessing a credit union’s climate-related and environmental risk is not a ‘one and done’ exercise, so no matter where a credit union might be on their path to risk maturity in this context, it is worth revisiting the risk assessment stage periodically to ensure the credit union continues to adapt to changes in its own risk universe including its operational, legislative and regulatory environments.
This guide seeks to assist Risk Management Officers to place their climate-related and environmental risk mitigation programme into context within their own strategic plan and then consider the implications for the credit union across the various categories of risk most impacted in this regard. This particular guide includes a checklist for completing the risk assessment and also provides examples of climate-related and environmental Key Performance Indicators and Key Risk Indicators to be considered for ongoing monitoring. It also includes an outline of an approach to credit union-specific climate-related and environmental risk scenario testing.
Future risk assessment guides will focus on the Social and Governance elements of the Environmental, Social and Governance (‘ESG’) expectations for credit unions.