ICM2001-Climate Change and Risk Management

Module Provider: ICMA Centre
Number of credits: 20 [10 ECTS credits]
Terms in which taught: Spring term module
Non-modular pre-requisites:
Co-requisites: ICM1003 Climate Change and Sustainable Business and Finance
Modules excluded:
Current from: 2023/4

Module Convenor: Dr Simone Varotto
Email: s.varotto@icmacentre.ac.uk

Type of module:

Summary module description:

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 the expected damage to physical assets caused by extreme weather events, for example, floods, windstorms, draughts and wildfires. We will also explore the exposure of businesses to transition risks resulting from policy and legal changes as governments and societies adjust to lower carbon economies.


The aim of this module is to identify and assess the potential impacts of climate-related risks on financial institutions and corporations. Effective climate risk measurement and management can help to ensure that companies are better equipped to manage these risks and contribute to a more sustainable and resilient global economy.

Assessable 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. 

  • Explain and analyse the cost implications arising from the transition to less carbon intensive economies.

  • Apply methods to reduce and manage physical and transition risks associated with climate change.

Additional outcomes:

Student will learn to process climate risk data to perform various tasks related to climate risk measurement and management in financial institutions and corporations.

Outline 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

Global context:

The module will cover climate risk management practices in different geographical regions around the world.

Brief description of teaching and learning methods:

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

Contact hours:
  Autumn Spring Summer
Lectures 20
Seminars 10
Guided independent study:      
    Wider reading (independent) 30
    Wider reading (directed) 20
    Exam revision/preparation 50
    Advance preparation for classes 10
    Preparation for seminars 20
    Revision and preparation 40
Total hours by term 0 200 0
Total hours for module 200

Summative Assessment Methods:
Method Percentage
Project output other than dissertation 40
Class test administered by School 60

Summative assessment- Examinations:

Summative assessment- Coursework and in-class tests:

Two multiple choice question-based class tests of length 1.5 hours each in week 10 of the spring term and week 1 of the summer term

A group project to be submitted in week 2 of the summer term

Formative assessment methods:

Penalties for late submission:

The below information applies to students on taught programmes except those on Postgraduate Flexible programmes. Penalties for late submission, and the associated procedures, which apply to Postgraduate Flexible programmes are specified in the policy “Penalties for late submission for Postgraduate Flexible programmes”, which can be found here: https://www.reading.ac.uk/cqsd/-/media/project/functions/cqsd/documents/cqsd-old-site-documents/penaltiesforlatesubmissionpgflexible.pdf
The Support Centres will apply the following penalties for work submitted late:

  • 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 five working days;
  • where the piece of work is submitted more than five working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.
The University policy statement on penalties for late submission can be found at: https://www.reading.ac.uk/cqsd/-/media/project/functions/cqsd/documents/cqsd-old-site-documents/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.

Assessment requirements for a pass:

50% weighted average mark

Reassessment arrangements:

By examination only, as part of the overall examination arrangements for the MSc programme, held during August/September.

Additional Costs (specified where applicable):

Last updated: 13 July 2023


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