2.1. Solvency II requires undertakings to consider in their system of governance, riskmanagement system and own risk and solvency assessment (ORSA) all risks they face in the short and long term and to which they are or could be exposed, also these risks are not (fully) included in the calculation of the SCR.
2.2. The information request conducted by EIOPA shows that less than 13% of undertakings made use of climate change risk scenarios in their ORSA (see Annex 1). Moreover, undertakings that undertook a quantitative analysis of climate change risk mostly did so considering a 1-5 years horizon.
2.3. This Opinion provides guidance to CAs to expect from undertakings that they consider both short and long-term climate change risks in their ORSAs using scenario analyses. This will be accompanied with costs as the risk management function will require additional resources and/or more services have to be sourced from external providers at additional costs. Generally, central functions, like
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