Transition Check

NOTE

Transition Check has now moved to an Excel-based implementation. The online tool may be updated in the future to reflect new scenarios, but at present, the Excel-based tool represents the latest scenario data.

Transition Check is a tool that takes a scenario-based approach for assessing transition risk and the potential impact of climate change on corporate lending portfolios within an overall framework consistent with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD).

Transition Check represents the culmination of two years of collaboration between the UN Environment Programme - Finance Initiative (UNEP FI), Oliver Wyman Consulting, and dozens of UNEP FI member banks within UNEP FI’s TCFD pilot projects. The approach behind Transition Check was developed and validated in the first TCFD pilot project and detailed in the Extending Our Horizons report.

This methodology leverages climate scenarios from the Network for Greening the Financial System (NGFS) produced by globally renowned researchers such as the Potsdam Institute (PIK) and the International Institute for Applied Systems Analysis (IIASA). Scenario variables are then transformed into financially relevant impacts for a broad range of economic sectors and geographies. These financial impacts can then be used to produce portfolio level expected losses (EL), probabilities of defaults (PD), and losses given default (LGD) under each scenario. Transition Check provides financial institutions with a dynamic and user-friendly way to conduct transition risk assessments using this tested approach.

Transition Check is currently only accessible for institutions that are members of UNEP FI.

To gain access to Transition Check’s Excel implementation, please contact unepfi-riskcentre@un.org.

Acknowledgements

In addition to the modeling teams at PIK and IIASA, Oliver Wyman and UNEP FI would like to acknowledge the 39 banks that have participated in UNEP FI’s Phase II TCFD pilot.

  • ABN-AMRO
  • ABSA
  • Access Bank
  • Bank of Ireland
  • Barclays
  • BMO
  • Bradesco
  • Caixa Bank
  • CIBC
  • CIMB
  • Citibanamex
  • Credit Suisse
  • Danske Bank
  • Deutsche Bank
  • DNB
  • EBRD
  • FirstRand
  • ING
  • Intesa Sanpaolo
  • Itau
  • KBC
  • Lloyds
  • Mizuho
  • MUFG
  • NAB
  • Nat West
  • Nedbank
  • NIB
  • Nomura
  • Nordea
  • Rabobank
  • Santander
  • Scotia Bank
  • Shinhan
  • Standard Bank
  • Standard Chartered
  • TD Bank
  • TSKB
  • UBS

Oliver Wyman & UNEP Terms & Conditions

This tool (the “tool”) conforms to the specifications required by the terms of Oliver Wyman’s engagement by UNEP FI and the working group of participating banks (the “Working Group”). The purpose of the tool is to illustrate the methodology agreed with the Working Group for assessing climate-related transition risks. This tool is not to be used, reproduced, or distributed for any purpose other than those permitted by the terms of Oliver Wyman’s engagement by the Working Group without the prior written permission of Oliver Wyman.

Information furnished by others which is incorporated or reflected in this tool, is believed to be reliable but has not been verified. No warranty is given as to the accuracy of such information. Public information and industry and statistical data which is included or reflected in this tool are from third party sources; however, we make no representation as to the accuracy or completeness of such information.

The results produced by this tool may contain predictions, forecasts, or hypothetical outcomes based on current data and historical trends and hypothetical scenarios. Any such predictions, forecasts, or hypothetical outcomes are subject to inherent risks and uncertainties. In particular, actual results could be impacted by future events which cannot be predicted or controlled, including, without limitation, changes in business strategies, the development of future products and services, changes in market and industry conditions, the outcome of contingencies, changes in management, changes in law or regulations, as well as other external factors outside of our control. Oliver Wyman accepts no responsibility for actual results or future events. No obligation is assumed to revise the tool to reflect changes, events or conditions which occur subsequent to the date hereof. Oliver Wyman shall have no responsibility for any modifications to, or derivative works based upon, the tool made by any members of the Working Group or any other third party.

The purpose of the tool is to illustrate the agreed methodology for assessing climate-related transition risks, but is not intended for use in business processes such as planning or risk assessment other than as an illustration. All decisions in connection with the use of the tool or any results produced by the tool are the sole responsibility of each member of the Working Group. This tool is for the exclusive use of the members of the Working Group. There are no third party beneficiaries with respect to this tool, and Oliver Wyman does not accept any liability to any third party. In particular, Oliver Wyman shall not have any liability to any third party in respect of the use of this tool or any results produced by this tool or any actions taken or decisions made as a consequence of the results produced by this tool.