Featured Product

    FSB Consults on Forward-Looking Climate Metrics for Financial Sector

    October 29, 2020

    FSB's Task Force on Climate-Related Financial Disclosures (TCFD) is seeking views on the decision-useful, forward-looking climate metrics for firms in financial sector, with the consultation ending on January 27, 2021. TCFD also published guidance on integrating climate-related risks into existing risk management processes and guidance on climate-related scenario analysis for non-financial firms. The guidance on scenario analysis is intended to assist non-financial companies interested in using climate-related scenarios as part of their efforts to implement the TCFD recommendations. It is expected to guide companies through the elements, considerations, challenges, limitations, pitfalls, and questions they may face in undertaking climate-related scenario analysis.

    The consultation on forward-looking climate metrics asks questions about the usefulness and challenges of such metrics and what may be necessary to enhance their comparability, transparency, and rigor. Through public consultation, TCFD aims to better understand the evolution of metrics used and disclosed by companies in the four financial groups that were identified in its 2017 supplemental guidance: asset owners, asset managers, banks, and insurance companies. Such metrics may focus on carbon and other emissions or other financially relevant factors. Weighted average carbon intensity and other carbon foot printing metrics provide some visibility into the carbon exposure of certain assets at a fixed point in time. Although still useful for decision-making, past carbon exposures provide little insight into potential future exposure. Financial sector organizations may also use forward-looking metrics to assess climate-related risk and opportunity outside of carbon exposure. Other forward-looking metrics could focus on physical climate-related risk, future valuations of specific assets, and applications of climate within more traditional financial valuation metrics. One example of a forward-looking financial metric is climate Value-at-Risk. TCFD will take consultation responses into consideration to determine whether further financial sector guidance on forward-looking metrics is needed.

    The guidance on integration of risk management and disclosures is aimed at companies that are interested in integrating climate-related risks into their existing risk management processes and disclosing information on their risk management processes in alignment with the TCFD recommendations. The guidance is intended to cover a wide range of companies—from banks and insurance companies to various types of nonfinancial companies, including energy; building and materials; and agriculture, food, and forest products companies. In addition, as with its recommendations in general, TCFD expects this guidance to be useful to companies of all sizes and located in various countries worldwide. The guidance:

    • describes the unique characteristics of climate-related risks that are important to consider when integrating such risks into existing processes.
    • explores the practicalities of integrating climate-related risks into existing risk management processes.
    • describes features of decision-useful risk management disclosures as well as examples of companies’ disclosures.
    • provides, via Appendices, further information on topics covered in the guidance, including transition and physical risk definitions, additional information to support integration, and references.

     

    Related Links

    Comment Due Date: January 27, 2021

    Keywords: International, Banking, Insurance, Securities, TCFD, Disclosures, Scenario Analysis, Climate Metrics, Climate Change Risk, ESG, FSB

    Related Articles
    News

    EBA Updates Filing Rules for Supervisory Reporting

    The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    EBA Publishes Standards on Disclosure of Investment Policy Under IFR

    The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).

    October 19, 2021 WebPage Regulatory News
    News

    APRA Finalizes Guidance for New Prudential Standard on Remuneration

    The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.

    October 18, 2021 WebPage Regulatory News
    News

    OCC Updated LIBOR Self-Assessment Tool for Banks

    The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).

    October 18, 2021 WebPage Regulatory News
    News

    TCFD Updates Guidance for Financial Disclosures on Climate Risk

    The Financial Stability Board (FSB) published a report that examines the progress made toward disclosures aligned with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

    October 14, 2021 WebPage Regulatory News
    News

    BCBS Report Examines Progress on Adoption of Basel III Framework

    The Basel Committee on Banking Supervision (BCBS) published the progress report on adoption of the Basel III regulatory framework in member jurisdictions.

    October 14, 2021 WebPage Regulatory News
    News

    ACPR Implements Updates Related to DPM Version 3.1

    The French Prudential Supervisory Authority (ACPR) has implemented, in its information system, updates linked to the Data Point Model (DPM) version 3.1.

    October 14, 2021 WebPage Regulatory News
    News

    EBA Note Examines Transition Risks of Benchmark Rates

    The European Banking Authority (EBA) published a thematic note that aims to identify and raise awareness of the transition risks of benchmark rates, as the London Interbank Offered Rate (LIBOR) and the Euro Overnight Index Average (EONIA) are close to being phased out.

    October 14, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7571