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Drought Stress Testing Tool – United Nations Environment – Finance Initiative

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<h4>Highlights</h4><div class="post-highlight"> <a href="https://www.unepfi.org/about/30-years-of-unep-fi/" title="30 years of UNEP FI"><h5>30 years of UNEP FI</h5></a> <p>2022 marks 50 years of environmental action through UNEP, 30 years of</p> </div><div class="post-highlight"> <a href="https://www.unepfi.org/news/remembering-richard-hansen-our-humble-high-flyer/" title="Remembering Richard Hansen: our humble, high-flyer"><h5>Remembering Richard Hansen: our humble, high-flyer</h5></a> <p>We lost a dear UNEP FI colleague recently, Richard Hansen, our web</p> </div></div> <div class="featured-content" id="featuredContent31802"> <h4>Highlights</h4><div class="post-highlight"> <a href="https://www.unepfi.org/news/remembering-richard-hansen-our-humble-high-flyer/" title="Remembering Richard Hansen: our humble, high-flyer"><h5>Remembering Richard Hansen: our humble, high-flyer</h5></a> <p>We lost a dear UNEP FI colleague recently, Richard Hansen, our web</p> </div></div> </div> </div> <!-- 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nav-item nav-item-54711 position-static"><a data-featuredID="42372" href="https://www.unepfi.org/legal-framework-for-impact/" class="nav-link has-featured-content ">A Legal Framework for Impact</a></li> </ul> </li> <li id="menu-item-65785" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-has-children dropdown nav-item nav-item-65785 position-static"><a data-featuredID="65785" href="https://www.unepfi.org/policy-and-regulation/" class="nav-link has-featured-content ">Policy and Regulation</a> <ul class="dropdown-menu sub-menu depth_1"> <li id="menu-item-77388" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-77388 position-static"><a data-featuredID="65785" href="https://www.unepfi.org/policy-and-regulation/csrd-esrs-implementation-programme/" class="nav-link has-featured-content ">CSRD/ESRS Implementation Programme</a></li> <li id="menu-item-71005" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-71005 position-static"><a data-featuredID="65785" href="https://www.unepfi.org/policy-and-regulation/regional-inititatives/" class="nav-link has-featured-content ">Regional Inititatives</a></li> </ul> </li> </ul> <div class="menu-featured-content mr-auto"> <div class="featured-content" id="featuredContent34082"> <h4>Highlights</h4><div class="post-highlight"> <a href="https://www.unepfi.org/regions/europe/unep-fi-to-support-csrd-implementation-by-leveraging-principles-for-responsible-banking-requirements/" title="UNEP FI launches new resources to support CSRD implementation by leveraging Principles for Responsible Banking requirements"><h5>UNEP FI launches new resources to support CSRD implementation by leveraging Principles for Responsible Banking requirements</h5></a> <p>UNEP FI has launched an ESRS Interoperability Package which helps banks</p> </div><div class="post-highlight"> <a href="https://www.unepfi.org/industries/banking/responsible-banking-priorities-and-blueprint-for-a-sustainable-future/" title="Responsible Banking - Priorities and Blueprint for a Sustainable Future"><h5>Responsible Banking - Priorities and Blueprint for a Sustainable Future</h5></a> <p>Leading responsible banks are transforming the finance sector through four</p> </div></div> <div class="featured-content" id="featuredContent51930"> <h4>Highlights</h4><div class="post-highlight"> <a href="https://www.unepfi.org/insurance/insurance/" title="Principles for Sustainable Insurance"><h5>Principles for Sustainable Insurance</h5></a> <p>About Launched at the 2012 UN Conference on Sustainable Development,</p> </div><div class="post-highlight"> <a href="https://www.unepfi.org/insurance/insurance/projects/" title="Priorities and Initiatives"><h5>Priorities and Initiatives</h5></a> <p>The insurance industry’s core business is to understand, manage and</p> </div></div> <div class="featured-content" id="featuredContent42372"> <h4>Highlights</h4><div class="post-highlight"> <a href="https://www.unepfi.org/industries/target-setting-protocol-fourth-edition/" title="NZAOA Target-Setting Protocol Fourth Edition"><h5>NZAOA Target-Setting Protocol Fourth Edition</h5></a> <p>With this release, the Net-Zero Asset Owner Alliance has published four</p> </div><div class="post-highlight"> <a href="https://www.unepfi.org/industries/to-serve-net-zero-clients-asset-managers-need-a-systematic-approach-to-climate/" title="To serve net-zero clients, asset managers need a systematic approach to climate"><h5>To serve net-zero clients, asset managers need a systematic approach to climate</h5></a> <p>Geneva, 6 February - The UN-convened Net-Zero Asset Owner Alliance</p> </div></div> <div class="featured-content" id="featuredContent65785"> <h4>Highlights</h4><div class="post-highlight"> <a href="https://www.unepfi.org/themes/climate-change/turning-point-how-policymakers-can-shift-the-trillions-needed-for-the-net-zero-transition/" title="Turning point: How policymakers can shift the trillions needed for the net-zero transition"><h5>Turning point: How policymakers can shift the trillions needed for the net-zero transition</h5></a> <p>Net-zero can only be achieved through systemic change. It is time to move</p> </div></div> </div> </div> <!-- d-flex flex-row --> </div> <!-- container --> </div> <!-- row --> </div> <!-- dropdown --></li> <li id="menu-item-31781" class="menu-item menu-item-type-custom menu-item-object-custom menu-item-has-children dropdown nav-item nav-item-31781 position-static"><a href="#" class="nav-link">Key Themes</a> <div class="dropdown-menu multi-column columns-3"> <div class="row"><div class="container"> <div class="d-flex justify-content-between"><ul class=" depth_0"> <li id="menu-item-52535" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-has-children dropdown nav-item nav-item-52535 position-static"><a data-featuredID="52535" href="https://www.unepfi.org/climate-change/climate-change/" class="nav-link has-featured-content ">Climate Change</a> <ul class="dropdown-menu sub-menu depth_1"> <li id="menu-item-51938" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-51938 position-static"><a data-featuredID="52535" href="https://www.unepfi.org/net-zero-alliance/" class="nav-link has-featured-content ">Net-Zero Asset Owner Alliance</a></li> <li id="menu-item-51932" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-51932 position-static"><a data-featuredID="52535" href="https://www.unepfi.org/net-zero-banking/" class="nav-link has-featured-content ">Net-Zero Banking Alliance</a></li> <li id="menu-item-71779" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-71779 position-static"><a data-featuredID="52535" href="https://www.unepfi.org/climate-change/net-zero-export-credit-agencies/" class="nav-link has-featured-content ">Net-Zero Export Credit Agencies Alliance</a></li> <li id="menu-item-75437" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-75437 position-static"><a data-featuredID="52535" href="https://www.unepfi.org/forum-for-insurance-transition-to-net-zero/" class="nav-link has-featured-content ">Forum for Insurance Transition to Net Zero</a></li> <li id="menu-item-75245" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-75245 position-static"><a data-featuredID="52535" href="https://www.unepfi.org/risk-centre/" class="nav-link has-featured-content ">Risk Centre</a></li> <li id="menu-item-51928" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-51928 position-static"><a data-featuredID="52535" href="https://www.unepfi.org/climate-change/climate-change/" class="nav-link has-featured-content ">More&#8230;</a></li> </ul> </li> <li id="menu-item-31786" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-has-children dropdown nav-item nav-item-31786 position-static"><a data-featuredID="31786" href="https://www.unepfi.org/nature/nature/" class="nav-link has-featured-content ">Nature</a> <ul class="dropdown-menu sub-menu depth_1"> <li id="menu-item-75244" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-75244 position-static"><a data-featuredID="31786" href="https://www.unepfi.org/risk-centre/" class="nav-link has-featured-content ">Risk Centre</a></li> <li id="menu-item-52527" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-52527 position-static"><a data-featuredID="31786" target="_blank" href="https://www.unepfi.org/blue-finance/#new_tab" class="nav-link has-featured-content ">Ocean Finance</a></li> <li id="menu-item-56065" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-56065 position-static"><a data-featuredID="31786" href="https://www.unepfi.org/nature/food-systems/" class="nav-link has-featured-content ">Food, Forests &#038; Land</a></li> <li id="menu-item-51945" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-51945 position-static"><a data-featuredID="31786" href="https://www.unepfi.org/nature/nature/" class="nav-link has-featured-content ">More&#8230;</a></li> </ul> </li> <li id="menu-item-51579" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-has-children dropdown nav-item nav-item-51579 position-static"><a data-featuredID="51579" href="https://www.unepfi.org/pollution-and-circular-economy/pollution-and-circular-economy/" class="nav-link has-featured-content ">Pollution &#038; Circular Economy</a> <ul class="dropdown-menu sub-menu depth_1"> <li id="menu-item-73883" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-73883 position-static"><a data-featuredID="51579" href="https://www.unepfi.org/pollution-and-circular-economy/circular-economy/" class="nav-link has-featured-content ">Circular Economy</a></li> <li id="menu-item-73882" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-73882 position-static"><a data-featuredID="51579" href="https://www.unepfi.org/pollution-and-circular-economy/pollution/" class="nav-link has-featured-content ">Pollution</a></li> <li id="menu-item-73881" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-73881 position-static"><a data-featuredID="51579" href="https://www.unepfi.org/pollution-and-circular-economy/energy-efficiency/" class="nav-link has-featured-content ">Energy Efficiency</a></li> <li id="menu-item-51925" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-51925 position-static"><a data-featuredID="51579" href="https://www.unepfi.org/pollution-and-circular-economy/pollution-and-circular-economy/" class="nav-link has-featured-content ">More&#8230;</a></li> </ul> </li> <li id="menu-item-51982" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-has-children dropdown nav-item nav-item-51982 position-static"><a data-featuredID="51982" href="https://www.unepfi.org/impact/positive-impact/" class="nav-link has-featured-content ">SDGs &#038; Impact</a> <ul class="dropdown-menu sub-menu depth_1"> <li id="menu-item-59441" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-59441 position-static"><a data-featuredID="51982" href="https://www.unepfi.org/impact/impact-protocol/" class="nav-link has-featured-content ">Impact Protocol</a></li> <li id="menu-item-51943" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-51943 position-static"><a data-featuredID="51982" href="https://www.unepfi.org/impact/unep-fi-impact-analysis-tools/" class="nav-link has-featured-content ">Tools for Holistic Impact Analysis</a></li> <li id="menu-item-51934" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-51934 position-static"><a data-featuredID="51982" href="https://www.unepfi.org/impact/impact-management-platform/" class="nav-link has-featured-content ">Impact Management Platform</a></li> <li id="menu-item-51983" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-51983 position-static"><a data-featuredID="51982" href="https://www.unepfi.org/impact/positive-impact/" class="nav-link has-featured-content ">More&#8230;</a></li> </ul> </li> <li id="menu-item-53647" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-has-children dropdown nav-item nav-item-53647 position-static"><a href="https://www.unepfi.org/social-issues/social-issues/" class="nav-link">Social &#038; Human Rights</a> <ul class="dropdown-menu sub-menu depth_1"> <li id="menu-item-51937" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-51937 position-static"><a href="https://www.unepfi.org/social-issues/social-issues/" class="nav-link">Human Rights</a></li> <li id="menu-item-66177" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-66177 position-static"><a href="https://www.unepfi.org/social-issues/just-transition/" class="nav-link">Just Transition</a></li> <li id="menu-item-66176" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-66176 position-static"><a href="https://www.unepfi.org/social-issues/financial-health-and-inclusion/" class="nav-link">Financial Health and Inclusion</a></li> <li id="menu-item-66175" class="menu-item menu-item-type-post_type menu-item-object-page nav-item nav-item-66175 position-static"><a href="https://www.unepfi.org/social-issues/gender/" class="nav-link">Gender</a></li> </ul> </li> </ul> <div class="menu-featured-content mr-auto"> <div class="featured-content" id="featuredContent52535"> <h4>Highlights</h4><div class="post-highlight"> <a href="https://www.unepfi.org/themes/climate-change/export-credit-agencies-supporting-billions-in-global-trade-form-net-zero-alliance/" title="Export credit agencies supporting billions in global trade form net-zero alliance"><h5>Export credit agencies supporting billions in global trade form net-zero alliance</h5></a> <p>Geneva, 4 December 2023 – At COP28 today, eight leading export credit</p> </div><div class="post-highlight"> <a href="https://www.unepfi.org/themes/climate-change/unep-fi-launches-risk-centre-to-help-members-address-sustainability-risks/" title="New Risk Centre to help UNEP FI members address sustainability risks"><h5>New Risk Centre to help UNEP FI members address sustainability risks</h5></a> <p>The UN Environment Programme Finance Initiative (UNEP FI) has unveiled its</p> </div></div> <div class="featured-content" id="featuredContent31786"> <h4>Highlights</h4><div class="post-highlight"> <a href="https://www.unepfi.org/nature/getting-started/" title="Getting Started"><h5>Getting Started</h5></a> <p>The Challenge The natural world - our forests, soils, land and ocean and</p> </div><div class="post-highlight"> <a href="https://www.unepfi.org/blue-finance/" title="Sustainable Blue Finance"><h5>Sustainable Blue Finance</h5></a> <p>Welcome to the Sustainable Blue Economy Finance Initiative, a UN-convened</p> </div></div> <div class="featured-content" id="featuredContent51579"> <h4>Highlights</h4><div class="post-highlight"> <a href="https://www.unepfi.org/news/160-financial-institutions-call-for-an-ambitious-international-treaty-to-end-plastic-pollution/" title="160 financial institutions representing 15.5 USD trillion combined assets call for an ambitious international treaty to end plastic pollution"><h5>160 financial institutions representing 15.5 USD trillion combined assets call for an ambitious international treaty to end plastic pollution</h5></a> <p>Geneva, 19 April 2024 – One hundred and sixty financial institutions and</p> </div></div> <div class="featured-content" id="featuredContent51982"> <h4>Highlights</h4><div class="post-highlight"> <a href="https://www.unepfi.org/industries/banking/impact-protocol/" title="Impact Protocol"><h5>Impact Protocol</h5></a> <p>Impact management explained, step by step! The Impact Protocol provides a</p> </div></div> </div> </div> <!-- d-flex flex-row --> </div> <!-- container --> </div> <!-- row --> </div> <!-- dropdown --></li> <li id="menu-item-31783" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-has-children dropdown nav-item nav-item-31783 position-static"><a href="https://www.unepfi.org/regions/" class="nav-link">Regions</a> <div class="dropdown-menu multi-column columns-3"> <div class="row"><div class="container"> <div class="d-flex justify-content-between"><ul class=" depth_0"> <li id="menu-item-31785" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-has-children dropdown nav-item nav-item-31785 position-static"><a href="https://www.unepfi.org/regions/africa-middle-east/" class="nav-link">Africa &#038; Middle East</a> <ul class="dropdown-menu sub-menu depth_1"> <li id="menu-item-65210" class="menu-item menu-item-type-post_type menu-item-object-post nav-item nav-item-65210 position-static"><a 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<a href="https://www.unepfi.org/themes/climate-change/2023-climate-risk-landscape/"> <img src="https://www.unepfi.org/wordpress/wp-content/uploads/2023/03/Climate-Risk-Landscape-2023-cover-scaled.jpg" class="img-fluid"> </a> <p class="top-title">07 March 2023<span class="separator"></span><span class="uppercase"><a href="https://www.unepfi.org/category/themes/climate-change/" rel="category tag">Climate Change</a>, <a href="https://www.unepfi.org/category/publications/" rel="category tag">Publications</a>, <a href="https://www.unepfi.org/category/themes/risk/" rel="category tag">Risk</a>, <a href="https://www.unepfi.org/category/themes/climate-change/tcfd/" rel="category tag">TCFD</a></span></p> <a href="https://www.unepfi.org/themes/climate-change/2023-climate-risk-landscape/"> <h5>The 2023 Climate Risk Landscape</h5></a> </article> <article class="col-12 col-md-4"> <a href="https://www.unepfi.org/events/global-roundtable-2022/"> <img src="https://www.unepfi.org/wordpress/wp-content/uploads/2022/05/Header-Clouds-2.jpg" class="img-fluid"> </a> <p class="top-title">17 May 2022<span class="separator"></span><span class="uppercase"><a href="https://www.unepfi.org/category/events/" rel="category tag">Events</a>, <a href="https://www.unepfi.org/category/events/unepfi-roundtable/" rel="category tag">Roundtables</a></span></p> <a href="https://www.unepfi.org/events/global-roundtable-2022/"> <h5>UNEP FI Global Roundtable 2022</h5></a> </article> <article class="col-12 col-md-4"> <a href="https://www.unepfi.org/industries/banking/2023-in-review-a-growing-membership-continues-ambitious-action-on-sustainable-finance/"> <img src="https://www.unepfi.org/wordpress/wp-content/uploads/2023/12/endofyeararticle-scaled.jpg" class="img-fluid"> </a> <p class="top-title">19 December 2023<span class="separator"></span><span class="uppercase"><a href="https://www.unepfi.org/category/industries/banking/" rel="category tag">Banking</a>, <a href="https://www.unepfi.org/category/themes/climate-change/" rel="category tag">Climate Change</a>, <a href="https://www.unepfi.org/category/industries/insurance/" rel="category tag">Insurance</a>, <a href="https://www.unepfi.org/category/industries/investment/" rel="category tag">Investment</a>, <a href="https://www.unepfi.org/category/themes/ecosystems/" rel="category tag">Nature</a>, <a href="https://www.unepfi.org/category/news/" rel="category tag">News</a>, <a href="https://www.unepfi.org/category/industries/policy/" rel="category tag">Policy</a>, <a href="https://www.unepfi.org/category/themes/pollution-circular-economy/" rel="category tag">Pollution &amp; Circular Economy</a>, <a href="https://www.unepfi.org/category/themes/impact/" rel="category tag">SDGs and Impact</a>, <a href="https://www.unepfi.org/category/themes/social-issues/" rel="category tag">Social</a></span></p> <a href="https://www.unepfi.org/industries/banking/2023-in-review-a-growing-membership-continues-ambitious-action-on-sustainable-finance/"> <h5>2023 in review: A growing membership continues ambitious action on sustainable finance</h5></a> </article> </div> </div> </div> </div> </header> <main> <div class="bg-publications-1 wall w1680 single-publication" > <div class="container h50"><nav class="breadcrumb"><a href="https://www.unepfi.org/">Home</a><span class="divider">&nbsp;/&nbsp;</span> <a href="https://www.unepfi.org/category/publications/">Publications</a> </nav></div> <div class="container"> <div class="row pt80 pb80"> <div class="col-md-2 col-12 col-sm-3"> <a href="https://naturalcapital.finance/wp-content/uploads/2018/11/Drought-Stress-Testing-Tool-FULL-REPORT.pdf"><img src="https://www.unepfi.org/wordpress/wp-content/uploads/2017/04/Drought-Stress-Testing-Tool-FULL-REPORT.jpg" class="img-fluid img-publication" /></a> </div> <div class="col-md-10 col-12 col-sm-9"> <p class="date-category text-white ">Apr 2017 | <a href="https://www.unepfi.org/category/industries/banking/" rel="category tag">Banking</a>, <a href="https://www.unepfi.org/category/themes/ecosystems/ncfa/" rel="category tag">NCFA</a>, <a href="https://www.unepfi.org/category/publications/" rel="category tag">Publications</a></p> <h2 class="line-semitransparent">Drought Stress Testing Tool</h2> <a href="https://naturalcapital.finance/wp-content/uploads/2018/11/Drought-Stress-Testing-Tool-FULL-REPORT.pdf" class="open-report">Open the report</a><span class="icon"><i class="bi bi-arrow-right"></i></span> </div> </div> </div> </div> <div class="container mt-5"> <div class="row"> <div class="col-12 col-sm-9"> <article class="post-type-publication"> <div class="post-content"> <p>The ‘Drought Stress Testing Tool<strong>’</strong> enables banks to assess if a client may be at risk from drought and how drought can affect a sector or region. A clearer understanding of the risk associated with droughts can help build more resilient financial institutions, and by shifting finance to less vulnerable sectors and regions, economies can become more stable and resource efficient. In turn, this helps the planet, as more resource efficient production in less vulnerable areas can produce healthier ecosystems better equipped to absorb shocks such as droughts.</p> <p>The ‘Drought Stress Testing Tool<strong>’</strong><span class="Apple-converted-space"> </span>allows financial institutions to see how incorporating drought scenarios changes the perception of risk in their own loan portfolios, based on the catastrophe modelling framework that the insurance industry has used for 25 years. It looks at five drought scenarios in four countries – Brazil, China, Mexico and the US – to model the impact on 19 different industry sectors, the companies in those sectors and the likelihood they will default on their loans.</p> <p>Find more information and get instructions on downloading the tool<span class="Apple-converted-space"> </span><a href="http://www.unepfi.org/ecosystems/ncfa/drought-stress-testing-tool/">here</a>.</p> <p>Read the full report<span class="Apple-converted-space"> </span><a href="https://naturalcapital.finance/wp-content/uploads/2018/11/Drought-Stress-Testing-Tool-FULL-REPORT.pdf">here</a>.</p> <p>Read the summary report<span class="Apple-converted-space"> </span><a href="http://www.naturalcapitalfinancealliance.org/wp-content/uploads/2017/04/Drought-Stress-Testing-Tool-SUMMARY.pdf">here</a>.</p> </div> </article> </div> <div class="col-12 col-sm-3"> <div class="sidebar"> <aside id="secondary" class="widget-area"> <section 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