These days it is being seen that Federal Reserve and the Treasuries are two organizations that are becoming more focused on climate change and the factors affecting such climate change. The changes in financial institution affect various things like the business which do a quality control check of climate and the client who sever the financial institutes. Climate change has some positive as well as some negative effects. The environmental change can be very dangerous for both the people having serious disease and normal population. Some institutions conduct annual reports on climate change and its effects on the eco cycle. For more than a decade, many developed and developing countries are organizing street tests of financial institutes to determine their preparation for a low and high probability impact on the financial and economic event. It tells us about the current status of economic expenditure and how can we improve our climate. A lower dividend payment and higher capital buffers is decided by the government. Also, how it needs to be regulated and run throughout a period is decided by the government.
Additionally, they are conducting extra tests to get a more detailed report of the situation so that they get prepared for any hazardous disaster coming their way. These tests will be more automated and technology-driven and the organization will be providing full support to make this happen successfully. A test needs to be conducted in a channelized way so that it can give facts and figures without any failure. The government is moving towards conducting a climate stress test as well, which will give us data of small areas to provide more treatments to people residing there.
The motive behind conducting these tests is that it will give an overview of the climate-related event before the flood, storms, and fire situations regarding the level of damage caused due to the change in the value of the physical assets. Also, climate change policies push societies to adopt new ways and techniques towards new forms of energy and transportation.
