Elevating ESG in Banking: A Journey to Spearhead Climate Risk Management

Discover how a Bridgeforce client, committed to Environmental, Social and Governance (ESG) practices, harnessed our project management experience to create a framework for managing climate risk.

In the wake of a robust corporate commitment to ESG practices, a super-regional US bank recognized the need for adaptation and embarked on a journey to establish a cutting-edge framework for managing climate risks within their portfolio.

Bridgeforce provided a change management framework that enabled the bank to turn their vision into reality. Our advisors helped craft a structure that seamlessly adapted to regulatory changes, integrated with everyday business operations and helped the bank fulfil its fiduciary responsibilities to its shareholders.

Major Bank Needed Project Management Expertise for Climate Risk Framework

The client’s ESG teams intended to integrate the framework into their regular operations through program management routines. However, this endeavor presented a unique challenge. They were uncertain about how to proceed. The bank lacked the available experienced resources for this task, had competing priorities, and the framework was far from complete.

After successfully completing a recent project with the bank, we were invited to enhance their initiative by providing program management support. This bolstered the efforts of internal SMEs from risk management, corporate responsibility and IT.

Project Management Focused on Nine Climate Risk Workstreams

Together, we created strong management and reporting routines for nine different project workstreams. Some of the workstreams included climate risk identification, scenario analysis and stress testing, reporting, climate strategy, data and technology, and disclosures.

In this managerial role, Bridgeforce advisors helped the client identify roadblocks in their workstreams, pinpoint significant risks, make critical decisions, meet deadlines, and tackle various other challenges. We quicky immersed ourselves in the principles of climate risk, the terminology used and our client’s short- and medium-term climate risk goals. Recognizing the increasing importance of climate risk to the industry, Bridgeforce engaged a specialist ESG consultancy firm. This firm was tasked with designing and delivering an enterprise-wide climate risk training program.

Many Moving Parts Required a Complex Project Management Approach

While our program structure and routines provide the client with assurance that all required tasks were being attended to, the “mechanical” aspect of the engagement was only part of the story.  This was a complex program of work, characterized by:

• breaking new ground – the subject matter was unfamiliar to the client and there was no precedent to follow,
• multiple dependencies on third party suppliers,
• data challenges, whether sourcing data from the client’s own systems or purchasing from external sources to fill gaps identified,
• resource shortfalls and competing priorities meant that subject matter experts were spread thinly, working on their climate risk responsibilities alongside existing commitments.

Bridgeforce Successfully Addressed Client Skepticism Regarding New Responsibilities

One challenge of the project was ensuring the client team’s comfort with their new responsibilities. To alleviate client employees’ concerns, Bridgeforce advisors provided extra handholding and created straightforward tools to use as the new framework rolled out. We supplied model documentation and a deliverable tracker to aid staff in managing their responsibilities. Ultimately, the framework was seamlessly integrated with existing duties.

Delivering Assurance, Confidence and Compliance for ESG in Banking in New Climate Risk Framework

Bridgeforce transferred control to the client’s in-house project manager. Above all, the client was assured that the climate risk program was adaptable, responsive to regulatory changes and built to last. Plus, the finished climate risk framework program seamlessly integrated with the bank’s day-to-day operations. Lastly, the bank was confident that there was a robust tool in place that included reporting and management routines to track progress of their ongoing climate goals.

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