Name one tool used for assessing climate risks in financial institutions.

The Climate Risk Assessment Framework is a comprehensive tool specifically designed to evaluate climate-related risks faced by financial institutions. This framework helps organizations systematically identify, assess, and manage risks associated with climate change, considering both physical risks (such as extreme weather events) and transitional risks (such as shifts towards a low-carbon economy).

Utilizing a structured framework allows financial institutions to incorporate climate risk into their broader risk management practices, ensuring that they make informed decisions based on a thorough understanding of potential vulnerabilities and impacts related to climate change. This aligns with the growing recognition among regulators and investors of the importance of integrating sustainability and climate considerations into financial decision-making processes.

Other tools mentioned, while relevant to sustainability and risk management, do not specifically focus on the assessment of climate risks within financial contexts.