Report
CBES to Assess Resilience of Financial Institutions to Climate Change
This report examines the Bank of England’s 2021 Climate Biennial Exploratory Scenario (CBES), a climate stress-testing framework designed to assess the resilience of UK-based banks and insurance companies to climate-related risks. The exercise evaluates both physical risks, such as extreme weather events, and transition risks arising from the shift to a low-carbon economy. By analyzing institutions’ exposure to climate-related challenges, the CBES aims to improve understanding of potential financial impacts and identify gaps in risk management practices. The framework incorporates multiple scenarios reflecting different pathways for climate action, including early, late, and limited intervention approaches. The report highlights how climate change is becoming a critical factor in financial
