Today the Bank of England (Bank) launches the second round of the Biennial Exploratory Scenario (BES) exercise on financial risks from climate change. The objective of the Climate BES is to explore the financial risks posed by climate change for the largest UK banks and insurers (participants). This is in line with the plan for the Climate BES set out in June 2021. All first round Climate BES participants are taking part in the second round. Further background on the Climate BES can be found in the Key elements documents of the 2021 Biennial Exploratory Scenario.
The second round of the BES will comprise a small number of questions, which will further explore participants’ strategic responses to the three scenarios published as part of the first round and the associated implications for their business models. Participants will not be required to update the quantitative loss projections they provided as part of the first round of the exercise.
The deadline for participants’ second round submissions will be the 31 March 2022. The Bank expects to publish results from the Climate BES in May 2022.