Banking Climate Readiness Utility

Getting ready for mandatory climate risk disclosures

The time to prepare for significantly increased reporting is now. Banking Climate Readiness Utility (BCRU) is the result of a collaboration with a consortium of US mid-sized and regional banks to develop a methodology that will deliver high-quality assessments and benchmarking to fulfill the new SEC requirements at lower cost and higher quality.

BCRU Membership

The goal of BCRU is to provide member banks with the necessary data and analytics to build their disclosures on an annual basis by helping them:

Identify and quantify climate risks, including physical and transition risks across loan portfolios, as well as bank offices and branches
Quantify and baseline Scope 1, 2 and 3 GHG emissions, including Category 15 “financed emissions”
Define the approach to measure the climate related impacts on the bank’s financials

Our members can also take advantage of a climate immersion session to build an understanding of the various climate elements and risks.

Benefits of BRCU Membership

Best value

We offer all the climate services mid-sized and regional banks need at lower cost and higher quality.

Member governance

Our work is governed by an advisory board consisting of rotating executives of member banks.

Continued evolution

We aim to offer additional services based on member demand (e.g., TCFD reporting), and decrease cost over time through automation and standardization.

Collective learning

We work with our members to set standards for mid-sized and regional banks and facilitate best practice sharing through workshops.

The BCRU Offer

Two-day McKinsey Climate Academy

Facilitated climate immersion sessions for up to five members of the bank to build an understanding of the various climate elements including fundamentals of climate science, climate risk, and GHG emissions.

Climate risk identification and assessment

Heatmapping of Residential Real Estate, Commercial Real Estate and Commercial & Industrial (C&I) portfolios; quantitative analysis of physical climate hazards that affect bank offices and branches; qualitative analysis of transition risks across the portfolios and business operations using a standardized scale; and conceptual soundness review of risk assessment.

GHG emissions initial baselining

Baselining of emissions for Scope 1/2/3 with overview of concentration sectors/customers; assessment of Scope 3 Category 15 “financed emissions” – typically the most material Scope 3 category for banks; and validation of analytics developed for GHG emissions initial baselining for Scope 1/2.

Impact assessment framework

Framework and approach to measure the climate-related impacts on the bank’s financials, including physical risks, e.g., severe weather events, transition risks and activities, and climate-related opportunities.

Readiness assessment and benchmarking

Capability readiness assessment survey leveraging McKinsey’s Climate Capabilities Maturity Matrix to assess current state and identify key gaps in the bank’s climate analysis capabilities and capabilities readiness benchmarking against peers.

Featured experts

Peter Noteboom

Senior Partner, Seattle

Peter leads the Banking Risk & Resilience client service for the Americas and has served US regional and global banks on a range of strategy, productivity transformation and growth topics.

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Alexis Trittipo

Partner, New York

Alexis leads McKinsey’s climate analytics work globally, advising and serving companies across financial services, corporates, and the public sector on topics related to climate risk, resilience, and adaptation. This includes a significant focus on helping clients make data-based decisions to assess and address the impacts of climate change.

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Thomas Bligaard Nielsen

Partner, London

Thomas helps leading financial institutions assess the impact of energy transitions, environmental policy, and the physical consequences of environmental change. He advises clients across banking, investment, and insurance to support public disclosures, regulatory stress testing, portfolio construction, improved investment and credit processes to account for climate risk and opportunities.

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Ross Tisnovsky

Senior Solution Leader, Miami

Corporate entrepreneur with over 20 years of experience in leading strategic initiatives and building new technology-enabled service lines, focused on advisory, advanced analytics and data science.

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Dan Stephens

Senior Partner, Washington

Dan founded and leads McKinsey’s Sustainable Finance practice in the Americas. He advises senior leaders across the public and private sectors, including in sustainability, financial services, housing, education, and customer experience.

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Munya Muvezwa

Partner, Carolinas

Munya is a leader in the Wholesale Banking practice, focusing on driving transformational change in wholesale banking and credit risk with experience on topics such as frontline excellence and effectiveness, digital strategy, and credit risk process optimization in wholesale banking.

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Ritesh Jain

Partner, New York

Ritesh is a core member of the Global Risk and Resilience practice. He leads McKinsey’s efforts on global banking, climate risk and climate readiness. Ritesh serves both national and global banking and securities groups who are looking for risk management in preparation for economic and climate change, including net zero banking and climate in banking.

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