HKMA issued a letter to the Hong Kong Association of Banks and the DTC Association for consultation on the common assessment framework for green and sustainable banking. HKMA had announced, in May 2019, the adoption of a three-phased approach to promote green and sustainable banking in Hong Kong. Regarding the work in phase I, with the support of a working group consisting of 22 authorized institutions, HKMA has developed the common assessment framework. The framework aims to assess the “greenness” of authorized institutions, the results of which would, in turn, facilitate authorized institutions’ setting of appropriate strategies, plans, or targets in managing climate and environment-related risks. HKMA is requesting comments by January 21, 2020.
The framework consists of two parts (Part A and Part B) that collect information surrounding 21 sub-elements grouped under six elements:
- Governance in terms of Board and senior management oversight and the roles and responsibilities of the board and senior management of an institution
- Corporate planning and tools, including stress testing
- Risk management process, including risk reporting
- Business policies, products, and services
- Performance and resources
- Disclosure and communication, including plan to disclose information in accordance with recommendations of the FSB Task Force on Climate-Related Financial Disclosures
These elements and sub-elements represent the major areas on which an institution would focus in managing climate and environment-related risks and are usually found in standards, initiatives, or recommendations of international bodies and regulators of other jurisdictions. In light of the diversity of the authorized institutions in terms of size, nature, and complexity of business, HKMA intends to initially implement the framework on selected authorized institutions.
Comment Due Date: January 21, 2020
Keywords: Asia Pacific, Hong Kong, Banking, Sustainable Banking, Common Assessment Framework, Disclosure, Climate Related Risks, ESG, Stress Testing, Reporting, HKMA
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.
The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.
Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)
The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)