ICM518: Climate Change and Risk Management

Module code: ICM518

Module provider: ICMA Centre; Henley Business School

Credits: 20

Level: 7

When you'll be taught: Semester 2

Module convenor: Professor Simone Varotto, email: s.varotto@icmacentre.ac.uk

Module co-convenor: Professor Nigel Arnell, email: n.w.arnell@reading.ac.uk

Additional teaching staff 1: Professor Emese Lazar, email: e.lazar@icmacentre.ac.uk

Pre-requisite module(s):

Co-requisite module(s): IN THE SAME YEAR AS TAKING THIS MODULE YOU MUST TAKE MTMCCC (Compulsory)

Pre-requisite or Co-requisite module(s):

Module(s) excluded:

Placement information: NA

Academic year: 2024/5

Available to visiting students: No

Talis reading list: No

Last updated: 19 November 2024

Overview

Module aims and purpose

This module provides a detailed discussion of the climate risks faced by corporations and financial institutions. Students will learn how climate data and climate models can be used to measure physical risks, that is the expected loss or damage of physical assets, such as residential and commercial properties, plants and equipment, caused by extreme weather events, for example, floods, windstorms, draughts and wildfires. The exposure of businesses to transition risks resulting from policy and legal changes as governments and societies adjust to lower carbon economies, will be explored. 

Module learning outcomes

By the end of the module, it is expected that students will be able to: 

• Critically evaluate the different types of climate risks. 
• Apply quantitative techniques based on climate data and climate models to measure the financial impact of weather events on banks, insurance companies and businesses.  
• Apply methods to reduce and manage physical and transition risks associated with climate change.  

Module content

1. Introduction to physical risk, transition risk and liability risk  
2. Physical risk measurement, climate data and climate models  
3. Hedging and managing physical risk. The role of insurance companies and financial markets 
4. Climate analytics to manage climate risk in the business sector. 
5. Climate risk and the financial sector 
6. Transition risk measurement and management. 
7. Case studies 

Structure

Teaching and learning methods

The core theory and concepts will be presented during lectures. Problem sets will be solved in workshops. 

Study hours

At least 30 hours of scheduled teaching and learning activities will be delivered in person, with the remaining hours for scheduled and self-scheduled teaching and learning activities delivered either in person or online. You will receive further details about how these hours will be delivered before the start of the module.

Please note the independent study hours above are notional numbers of hours; each student will approach studying in different ways. We would advise you to reflect on your learning and the number of hours you are allocating to these tasks.

Semester 1 The hours in this column may include hours during the Christmas holiday period.

Semester 2 The hours in this column may include hours during the Easter holiday period.

Summer The hours in this column will take place during the summer holidays and may be at the start and/or end of the module.

Assessment

Requirements for a pass

50% overall grade

Summative assessment

Penalties for late submission of summative assessment

The Support Centres will apply the following penalties for work submitted late:

Assessments with numerical marks

• where the piece of work is submitted after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for that piece of work will be deducted from the mark for each working day (or part thereof) following the deadline up to a total of three working days;
• the mark awarded due to the imposition of the penalty shall not fall below the threshold pass mark, namely 40% in the case of modules at Levels 4-6 (i.e. undergraduate modules for Parts 1-3) and 50% in the case of Level 7 modules offered as part of an Integrated Masters or taught postgraduate degree programme;
• where the piece of work is awarded a mark below the threshold pass mark prior to any penalty being imposed, and is submitted up to three working days after the original deadline (or any formally agreed extension to the deadline), no penalty shall be imposed;
• where the piece of work is submitted more than three working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.

Assessments marked Pass/Fail

• where the piece of work is submitted within three working days of the deadline (or any formally agreed extension of the deadline): no penalty will be applied;
• where the piece of work is submitted more than three working days after the original deadline (or any formally agreed extension of the deadline): a grade of Fail will be awarded.

The University policy statement on penalties for late submission can be found at: /cqsd/-/media/project/functions/cqsd/documents/qap/penaltiesforlatesubmission.pdf

You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work.

Formative assessment

Formative assessment is any task or activity which creates feedback (or feedforward) for you about your learning, but which does not contribute towards your overall module mark.

Multiple choice tests

Reassessment

Additional costs