--- title: Climate Change Top Emerging Risk For Banks description: climate change is top for the first time since the inception of the EY and IIF survey. --- ![websites-group](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/new-MMG-01.svg) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-new-marketsmedia-logo.svg)](https://www.marketsmedia.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-traders-redlogo.svg)](https://www.tradersmagazine.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-bestexe-logo.svg)](https://www.bestexecution.net/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-fidesk-logo.svg)](https://www.fixglobal.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-fixglobal-new-logo.svg)](https://www.fixglobal.com/) - [*Facebook*](https://www.facebook.com/MarketsMedia/) - [*Twitter*](https://twitter.com/marketsmedia) - [*Linkedin*](https://www.linkedin.com/company/markets-media-llc) - [Newsletter](https://articles.marketsmedia.com/climate-change-top-emerging-risk-for-banks#popup-newsletter) #### Want the latest news on securities markets -- FREE? 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Only about half (52%) of CROs said the same in 2019. In the near-term, almost half (49%) of CROs now view climate change as a top risk requiring their urgent attention over the next 12 months. In 2019, only 17% took that view. Beyond climate change, the most important emerging risk according to CRO respondents is the length and depth of the global economic recovery (83%). Mark Watson, EY Americas Financial Services Organization Board Matters Deputy Leader, says: “In the past year, we saw climate change rapidly ascend to the top of banks’ long-term risk agendas for the first time. Bank boards and senior management must remain resilient across a broader set of dimensions as the world adapts to a post COVID-19 world, and it’s clear that now includes climate-related risks, as well as other environmental, social and governance matters.” The survey finds that banks in practice are still maturing in their ability to assess physical and transitional risk exposures: just over half (54%) have a preliminary understanding of their climate change risk exposure and more than a quarter (28%) have a somewhat complete understanding. In the near-term, banks believe credit risk will be the No. 1 concern over the next 12 months – according to 98% of CROs – amid the global economic recovery from the COVID-19 pandemic. Cybersecurity is perceived to be the second most urgent risk (80%). Andrés Portilla, Managing Director, Regulatory Affairs at the IIF, says: “While cybersecurity has long been the leading immediate concern for CROs, the COVID-19 pandemic changed the game. The breadth and depth of the pandemic’s shock to the global economy has brought credit concerns to the forefront for banks over the next 12 months.” Additional key survey findings include: - Almost one in three (29%) of banks now believe they can manage down costs of controls over the next three years by using data and technology to improve risk management. - Seven of the top 10 emerging risks according to CROs relate to technology and data, including the pace and breadth of change from digitization (68%), industry disruption due to new technologies (68%) and obsolescence/legacy systems (62%). - Based on lessons learned from the COVID-19 pandemic, 93% of CROs expect to see the introduction of new or additional regulatory requirements on operational resilience, and 60% of CROs expect the same on financial resilience. - CROs expect their banks to further accelerate their digital transformation, including by automating processes (88%), modernizing core technology platforms (66%) and delivering enhanced insights to customers (64%). For more information, please visit [ey.com/bankingrisk](https://www.ey.com/en_gl/banking-capital-markets-risk-regulatory-transformation/how-resiliency-in-risk-management-is-the-new-top-priority-for-banks)**.** Source: IIF [Share](https://www.facebook.com/share.php?u=https://articles.marketsmedia.com/climate-change-top-emerging-risk-for-banks) [Tweet](https://twitter.com/intent/tweet?text=US+ETFs+Have+Record+Net+Inflows&url=https://articles.marketsmedia.com/climate-change-top-emerging-risk-for-banks) [Share](https://www.linkedin.com/cws/share?url=https://articles.marketsmedia.com/climate-change-top-emerging-risk-for-banks) ![email](https://articles.marketsmedia.com/hubfs/Markets%20Media/email.svg) ### NEWSLETTER SIGN UP And receive exclusive articles on securities markets ### Related articles 1. 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