成人头条

By Professor Jason A. Lowe OBE and Professor Iain Clacher
University of Leeds | UK Centre for Greening Finance & Investment 

Many of the conversations we have with organisations in the finance sector are, ultimately, about managing risk. Whilst we can bring expertise in climate science (Jason) and finance (Iain), we recognise that building societies already have vast experience of considering risks and benefits, and our aim is to help to join up your  experience of risk-based decision making with the specialist information we can bring related to climate change finance.

Climate change is already here, with clear and measurable effects on extreme weather. The frequency of extremely hot days has increased, and we are seeing events, such as the 40.3°C temperature measured in summer 2022, which haven’t been seen before in the UK. We are also seeing a shift towards more intense rainfall, which can cause flooding, and at the coast sea level is rising faster than it has in previous decades.

In the future, even with the most stringent reductions in greenhouse gas emissions across the world, some further climate change is now locked in, but the amount of climate disruption will depend on how much and how quickly we, as a global society, reduce these emissions. The UK has already made a good start on its share of emission reductions, but our emissions are less than 1% of the world’s total. The consequence of the climate change that has already occurred and the future climate change that we are committed to means we need to plan to deal with the physical risks from climate change. 

What does this mean for building societies? 

Since so much of the balance sheet of a building society involves lending in the form of residential mortgages it will be crucial to understand the exposure of properties to climate risks. This in turn will mean not only tracking the weather hazards but also the standard of protection for each property and maintaining a view on the long- term insurability of properties. To place this in perspective, even with current global policy in place to tackle climate change, warming over the next 25-year period could take us to levels not experienced on earth for at least 100 thousand years. There is also a need to consider the impacts of climate on the processes of doing business; from ensuring data centres are adapting to climate change, to considering the wellbeing of staff in offices and working from home in the future climate. 

 At the Building Societies Annual conference we ran a facilitated session on climate change risk, partly to raise awareness and partly to learn more about the risks to your sector and organisations. Whilst many building societies are well on their way to thinking about the contributions of their business to reducing greenhouse gas emissions, the consideration of climate resilience is much less comprehensive. Our research programme, CGFI Centre for Greening Finance and Investment), and in particular the University of Leeds climate finance hub is here to help.

A key goal of CGFI is to accelerate the use of decision-useful climate information into different parts of the financial system. This requires collaboration with industry to understand their sector specific issues and requirements. At the same time, we want to support open data and models. Open data and open models enable better decision making at a macro-level as transparency increases confidence in model outputs so that decisions  are not based on a blackbox solution. Transparency also allows us to explicitly acknowledge the limits of what climate models can tell us and where science understanding stops, and commercial imperatives begin as there are trade-offs.

To this end, our collaboration with the Building Society Association (BSA) is going to allow us to better understand the major issues facing building societies when it comes to incorporating climate information into risk modelling and management. Over the coming 9 months, we will be working with the 成人头条and a climate intern to do just that.

To find out more about the CGFI, visit