The Association of Central Banks of Latin America and the Caribbean (CEMLA), the Association of Supervisors of Banks of the Americas (ASBA), and the Latin American Association of Insurance Supervisors (ASSAL), together with the UN Environment Programme, and with the financial support of the EUROCLIMA+ Programme, have created the Climate Financial Risk Center (CFRCenter) for LAC to promote open discussion, build capacity, and share knowledge and experiences on identifying, assessing, disclosing, and managing climate-related financial risks.
Latin America and the Caribbean (LAC) is the second most disaster-prone region globally, where climate change impacts are projected to cost US$100 billion per year over the next 30 years. The scale of these losses affects both LAC’s macroeconomic prospects and potential financial stability. Although central banks and financial regulators are becoming increasingly more aware of climate-related financial risks, within LAC the implementation of climate regulation and the integration of climate risk insights into financial activities remain at a relatively early stage.
The CFRCenter will play a key role in building knowledge and capacity for supervisors and private sector institutions alike on climate stress testing. Its outputs will promote effective climate risk management in financial systems and help finance seize the opportunities that come with building a low-emissions and climate-resilient economy.
This could be the first step for countries in the region to begin to understand and learn about different approaches to measuring and managing climate risks,