European bank BNP Paribas (BNPP) announced today a partnership with business and technology consultancy Baringa Partners to help develop the bank’s climate scenario analysis capability.

According to BNPP, the establishment of an integrated climate scenario analysis capability will strengthen its ESG risk management framework, bringing an additional objective and data driven approach to the bank’s climate strategy and commitments, climate risk management, client engagement and internal and external reporting.

Marc Irubetagoyena, Head of Group Stress Testing and Performance, Planning & Synthesis at BNPP said:

“This is an important step for BNPP in the development and the effective implementation of our climate risk management framework across our organisation. Baringa is playing a leading role in helping the Financial Services sector globally to develop their climate strategies and to ensure they are credible and evidence based. This partnership will contribute to deliver the foundations of BNPP climate scenario analysis set-up.”

BNPP will leverage Baringa’s Climate Scenario Model, a fully integrated and configurable transition and physical risk model enabling users to see climate impacts from the portfolio down to the individual asset level, across multiple asset classes.

Antoine Bezat, Head of Stress Testing Methodologies and Models at BNPP, said:

“Climate scenario analysis is a critical strategic capability for BNPP. We are delighted to be working with Baringa who are deep experts in this topic. They bring 20 years of experience of energy system and climate transition modelling, as well as their experience as leaders in deploying climate strategies into many of the largest banks in the world.

“Baringa’s Climate Scenario Model stands out for its breadth of sector and asset coverage, the integration of transition and physical risk, and the ability to provide risk metrics down to the individual asset level. The modular and customisable nature of the solution will enable us to develop our own climate scenario and risk framework over time, to the specific needs of BNPP.”

Colin Preston, Head of Financial Services Sector & Climate Change at Baringa, added:

“We are thrilled to be working with BNPP – as one of the largest global banks, and an organisation that is recognised for its commitment to sustainability and climate. We will help BNPP to accelerate and embed practical and usable climate analytics across its organisation, feeding into its climate strategy, and into all key decision making and reporting. This will pave the way for others to follow across the industry.”