Determining the Materiality of Climate-Related Financial Risk

Understanding and analyzing the materiality of various climate-related financial risk exposures has become a critical goal for financial institutions. In pursuing this goal, they are motivated to ensure strong risk management practices and to meet regulatory expectations. Climate-related materiality has become a topic of discussion in various contexts such as “financial materiality,” “double materiality,” and “risk materiality,” with subtle implications depending on the context. O…