This document is a technical supplement to the First comprehensive report – Call for action published in April 2019. It discusses risk resulting from climate change, providing an overview of climate changes's impact on macroeconomics and financial stability with reference to both physical and transition risks. The report also includes the key assumptions used in its modelling processes.
It highlights both knowledge and methodology gaps, including interactions between macroeconomic and financial climate shocks, and calls for the financial system to be aware and prepare for those risks. This includes a list of options for central banks and supervisors for responding to climate-related risk, such as macroeconomic modelling and key indicators. It finishes with key findings, indicating that there are considerable financial implications from climate risk, and challenges in accurately quantifying the size of the impacts and transmission channels. Consequently, it is key to develop support for central banks and supervisors to identify and address climate-related risks.