On 29 May 2024, Trihita conducted a Sustainable Talk on OJK Climate Risk Management & Scenario Analysis (CRMS), just released at the beginning of this year. The OJK CRMS encourages Banks to integrate climate risks into Banks risk management process. It consists of 6 books that work as a guideline for reporting the climate risk assessment to OJK. All banks are required to report starting in 2026. The assessment involves performing a scenario analysis that identifies and measures risks within a specific timeframe. Banks must assess climate risks’ short-term and long-term effects on their financial health. Banks are advised to incorporate aspects of climate risks and stress testing methodologies using key variables and data published by the Network for Greening the Financial System (NGFS).
Twelve participants from 7 organisations, including national Banks, international donor organisations, and international consulting firms, participated in the talk to gain information and share their experiences on implementing climate risk assessments nationally and internationally. The discussion underlined the challenge of collecting data, that banks’ customers should also be made aware and pressured by OJK to receive the data and that further dialogue between OJK and the financial institutions and consultants will be needed.
Climate Risk Assessment is important for Banks to navigate climate change’s complex challenges. By requiring CRMS for banks, Indonesia is building awareness of resilience in the financial sector. However, the implementation will take some time as capacity building for Banks and potential lenders is required to ensure accurate data and analysis.
Trihita is very excited to provide its services to financial institutions to navigate this journey towards climate change risk assessment integration (CRMS). Please contact us on info@trihita-consulting.com