Principle 3 – Assigning climate-related financial risk management responsibilities within the organization
3.
The financial firm’s board should assign climate-related financial risk management responsibilities throughout the organization.
3.1
Responsibilities for identifying and managing climate-related financial risks should be clearly assigned to either board committees or appropriate senior management to ensure climate-related financial risks are appropriately considered as part of the financial firm’s business strategy and risk management framework.
3.2
As outlined in Principle 1, while the financial firm’s board remains ultimately responsible and accountable for the oversight of the management of climate-related financial risks, the assignment of responsibilities in line with Principle 3 should be formally documented.
3.3
Such roles and responsibilities should be clearly defined to ensure there is clarity over functions, accountability, governance structure, escalation processes and reporting procedures across the financial firm in relation to climate-related financial risk management.
3.4
Where dedicated climate-related roles or departments are established, their responsibilities and interaction with existing governance structures should be clearly defined and documented.
3.5
Roles and responsibilities for identifying and managing climate-related financial risks should be regularly reviewed to ensure it continues to be relevant to the nature and complexity of the business model and activities of the financial firm as well as the evolution of climate-related financial risks management approaches and methodologies.