The Climate Risk Management Toolkit for Financial Institutions is a practical resource designed to help organisations embed climate-related risk considerations into their core business operations. Developed by British International Investment (BII), the toolkit provides a structured framework for financial institutions to assess, manage, and report on climate risks in alignment with global standards.

Organisation behind the tool

The toolkit was developed and is maintained by British International Investment (BII), the United Kingdom’s development finance institution. It was launched to support financial institutions, particularly those operating in emerging markets, in navigating the complexities of climate change and meeting international reporting requirements.

What the tool does

The tool provides a comprehensive guide for integrating climate risk management across several functional areas. Key features include:

• A four-stage maturity model (including a ‘Discovery’ stage) to help institutions track their progress in developing climate risk capabilities.
• Guidance on embedding climate risk into governance structures and lending processes.
• Methodologies for portfolio monitoring and assessing physical and transition risks.
• Resources to support alignment with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

Target audience

The primary target audience includes financial institutions, fund managers, and investment professionals, specifically those operating within emerging markets. It is also relevant for sustainability officers and risk managers tasked with implementing ESG frameworks.

Relevance to finance professionals

• Risk assessment – Provides frameworks for evaluating how physical climate hazards and transition risks impact lending and investment portfolios.
• ESG analysis – Offers practical steps for financial institutions to report on environmental metrics and align with international disclosure standards.
• Investment context – Helps fund managers identify long-term climate-related vulnerabilities and opportunities in emerging market assets.
• Market insights – Facilitates better understanding of how climate factors influence the resilience of infrastructure, energy, and agricultural investments.