The Bank of England has launched its second exploration exercise into the financial risks associated with climate change.

The Biennial Exploratory Scenario (BES) considers the potential financial risks that could impact large UK banks and insurers.

As part of the second round, the banks and insurers taking part will be asked questions about the implications the three scenarios, published as part of the first round, could have on their businesses.

Those scenarios include the size of the financial exposures of businesses, the challenges facing business models, and how UK banks and insurance businesses can be supported in enhancing their management of the risks associated with climate change.

As part of that, the BES considers two main risk areas - those that could arise as the country moves to net zero emissions, those associated with the higher global temperatures should no action be taken.

The BoE said it expects to publish the results of the Climate BES in May 2022.

© 2022 funds europe