Featured Product

    FINMA Consults on Climate Risk Disclosures for Banks and Insurers

    November 10, 2020

    FINMA is consulting to amend the circulars on disclosure requirements for banks and insurers, to increase transparency with respect to the climate change risks. The consultation ends on January 19, 2021. To enhance transparency, FINMA is specifying the disclosure requirements for climate change risks for large financial market players. The more comprehensive and consistent disclosure of climate-related financial risks is intended to support an adequate analysis of these risks and to promote comparability and market discipline.

    FINMA aims to achieve a proportionate and principle-based structuring of the climate risk disclosures. Institutions in categories 1 and 2—that is, systemically important banks and large insurance companies—are required to make their climate-related financial risks transparent. The regulatory approach of FINMA is based on the internationally recognized recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). As per the circular, the following principle-based elements should be covered and disclosed:

    • Governance. Describe how the Board of Directors fulfils its oversight responsibilities in respect of the climate-related financial risks
    • Strategy. Describe and identify the key climate-related financial risks (short-term, medium-term, and long-term risks) as well as their impact on business strategy, business model, and financial planning
    • Risk management. Describe the risk management process for the identification, evaluation, and addressing of climate-related financial risks
    • Quantitative information. Provide information on climate-related financial risks and the methodologies underpinning such information

    For financial institutions, the repercussions of climate change can entail significant longer-term financial risks. In principle, financial institutions can build on their existing risk management systems. However, new developments in this sphere and new risk drivers in risk management must also be effectively identified and appropriately managed. In the area of disclosure of climate-related financial risks, FINMA has identified a targeted need for regulatory action in the balance sheets of its supervised entities and is setting out the corresponding regulatory details accordingly. 

     

    Related Links (in English and German)

    Comment Due Date: January 19, 2021

    Keywords: Europe, Switzerland, Banking, Insurance, Proportionality, Climate Change Risk, ESG, Governance, TCFD, Disclosures, FINMA

    Featured Experts
    Related Articles
    News

    BIS Paper Studies Impact of Fintech Lending on Small Businesses in US

    The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.

    September 26, 2022 WebPage Regulatory News
    News

    UK Regulators Issue CRR Changes and Stress Test Scenarios for Banks

    The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).

    September 26, 2022 WebPage Regulatory News
    News

    EBA Launches EU-Wide Transparency Exercise in 2022

    The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.

    September 23, 2022 WebPage Regulatory News
    News

    SRB on CRR Quick-Fix to Policy for Multiple Point of Entry Banks

    The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."

    September 22, 2022 WebPage Regulatory News
    News

    EC Rule Lists Advanced Economies for Market Risk Capital Calculations

    The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.

    September 21, 2022 WebPage Regulatory News
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8521