Featured Product

    FSB Sets Out Timelines for Actions to Address Climate Risks

    July 07, 2021

    The FSB Chair issued a letter to the G20 Finance Ministers and Central Bank Governors ahead of their July meeting. The letter is focused on issues such as the LIBOR transition, the need for post-pandemic reforms in the area of non-bank financial intermediation, and the need for coordinated action to address financial risks posed by climate change. Along with this letter, FSB has published a report on promoting climate-related disclosures, a report on gaps in data needed to monitor climate-related financial stability risks, and a roadmap for addressing climate-related financial risks.

    The roadmap for addressing climate-related financial risks, which was prepared in consultation with the standard-setting bodies and other relevant international bodies, supports international coordination in several ways. The roadmap sets out the work underway and expected to be done by standard-setting bodies and other international organizations in the short and medium term in the following key interrelated areas: 

    • Firm-level disclosures as the basis for the pricing and management of climate-related financial risks at the level of individual entities and market participants
    • Data in the context of use of consistent metrics and disclosures to diagnose climate-related vulnerabilities
    • Vulnerability analysis to feed into the design and application of regulatory and supervisory frameworks and tools
    • Regulatory and supervisory practices and tools that allow authorities to address identified climate-related risks to financial stability in an effective manner

    The roadmap sets out indicative steps, along with the associated indicative timelines, for actions in each of the above-mentioned areas, though each step described to be taken is subject to the outcomes of necessary prior steps being satisfactorily achieved. The time horizon of the roadmap focuses most specifically on actions in the short and medium term (2021–2023), but also indicates the direction and goals of work beyond that time period. The roadmap will allow for flexibility, including across jurisdictions, as priorities will evolve over time. By September 2021, BCBS expects to deliver on development of proposals on the its role in global efforts related to climate disclosure. The roadmap indicates that NGFS will publish, by December 2021, a "How-to guide" for central banks’ climate-related financial disclosure to promote TCFD-aligned disclosure by central banks, allowing them to lead by example. Notably, the roadmap sets out the third quarter of 2022 as an indicative delivery timeline for the International Sustainability Standards Board (ISSB), under the IFRS Foundation, to publish final version of the new sustainability reporting standard (focusing initially on climate). 

    From 2022 onward, FSB, in coordination with the IFRS, IOSCO, and others, expects to report annually, to the G20, on progress in implementation by jurisdictions and firms of disclosures and reporting in line with the international standards. By October 2022, FSB expects to develop consistent metrics for use in climate-related vulnerabilities monitoring and identify data availability and gaps for metrics. NFGS expects to finalize its work on Climate and Environmental Risk Analysis Methodologies and Metrics in 2022. NGFS expects to follow up work on scenario design and regularly publish sets of reference scenarios, with milestones to be determined at the September 2022 NGFS Steering Committee meeting. IAIS expects to provide guidance on supervisory practices for stress testing and scenario analysis, with work expected to start in September 2021 and possible first deliverables expected in 2022. Following all these deliverables, June 2024 is the indicative timeline for work on development of supervisory macro-prudential tools if needed, either for individual sectors or at the cross-sectoral jurisdiction-wide level.

     

    Related Links

    Keywords: International, Banking, Insurance, Securities, Climate Change Risk, ESG, Stress Testing, Disclosures, Reporting, Roadmap, Data Gaps, TCFD Recommendations, NGFS, BCBS, ISSB, IASB, G20, FSB

    Featured Experts
    Related Articles
    News

    BoE Consults on Approach to Setting MREL, Publishes Bail-In Guidance

    The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.

    July 22, 2021 WebPage Regulatory News
    News

    EBA Seeks Views on Proportionality Assessment Methodology

    The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.

    July 22, 2021 WebPage Regulatory News
    News

    US Agencies Propose Changes to Call Reports and Instructions

    Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.

    July 22, 2021 WebPage Regulatory News
    News

    PRA Finalizes Rulebook Definition of Higher Paid Material Risk-Taker

    The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Examines Asset Encumbrance in Banking Sector

    The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Publishes Methodological Guide to Mystery Shopping

    The European Banking Authority (EBA) published a methodological guide to mystery shopping.

    July 21, 2021 WebPage Regulatory News
    News

    APRA Issues Update on Capital Reform Policy Settings for Banks

    The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.

    July 21, 2021 WebPage Regulatory News
    News

    CPMI-IOSCO Assess Continuity Planning of Market Infrastructures

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.

    July 21, 2021 WebPage Regulatory News
    News

    BoE Announces Changes to Validation Rules for Form BTL

    The Bank of England (BoE) published questions and answers (Q&A) on OSCA to BEEDS migration for statistical reporting as well a presentation from the project overview session held with statistical reporters.

    July 20, 2021 WebPage Regulatory News
    News

    BCBS Proposes Changes to Process for Reviewing G-SIB Methodology

    The Basel Committee on Banking Supervision (BCBS) is consulting on a technical amendment to the Basel Framework to reflect a new process reviewing the global systemically important bank (G-SIB) assessment methodology.

    July 20, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7281