BaFin Consultation on Management of Sustainability Risks
BaFin published a consultation on dealing with sustainability risks. The consultation gives an orientation in dealing with the increasingly important issue of sustainability risks and provides numerous examples and questions for illustration purposes. BaFin sees its draft leaflet as a compendium of good practices that should apply in the light of the proportionality in the application supervised companies. The draft leaflet is, therefore, a useful supplement to the minimum requirements for risk management for credit institutions, insurance companies, and capital management companies. The consultation is open until November 03, 2019.
The draft leaflet addresses topics such as strategies, responsible corporate governance, and business organization. BaFin believes that a strategic approach to sustainability risks and implementation in the companies it supervises is necessary. Risk management forms the central point of the leaflet. It deals with the risk identification, controlling processes as well as the "classical" methods and procedures, with particular emphasis on sustainability risks. Furthermore, the leaflet deals with stress test issues such as the scenario analyses, especially with regard to the company-specific tests, in addition to dealing with the transition scenarios and impact scenarios.
Related Links (in German)
Comment Due Date: November 03, 2019
Keywords: Europe, Germany, Banking, Insurance, Securities, Sustainability Risk, ESG, Proportionality, Risk Management, Stress Testing, Governance, BaFin
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Metin Epözdemir
Metin Epözdemir helps European and African banks with design and implementation of credit risk, stress testing, capital management, and credit loss accounting solutions.
Emil Lopez
Credit risk modeling advisor; IFRS 9 researcher; data quality and risk reporting manager
Previous Article
SRB Updates MREL Policy to Reflect Changes in CRR 2Related Articles
EBA Examines Supervisory Practices, Issues Deposits Reporting Template
The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),
EC Mandates ESAs to Propose Amendments to SFDR Technical Standards
The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.
EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.
US Agency Publications Address Basel, Reporting, and CECL Developments
The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances
SEC Extends Comment Period on Climate Risk Disclosures
The U.S. Securities and Exchange Commission (SEC) looks set to intensify focus on crypto-assets and cyber risk and extended the comment period on the proposed rules to enhance and standardize climate-related disclosures for investors.
APRA Reduces Committed Liquidity Facility, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility and issued an update on the operational preparedness for zero and negative market interest rates.
EIOPA Responds to Stakeholder Views on Blockchain in Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published a feedback statement on the responses received to the consultation on blockchain and smart contracts in insurance.
HKMA Announces Decisions on CCyB and Loan Guarantee Scheme
The Hong Kong Monetary Authority (HKMA) announced that the applicable jurisdictional countercyclical capital buffer (CCyB) ratio for Hong Kong remains unchanged at 1.0%
CMF Consults on Basel Rules, Presents Roadmap to Address Climate Risks
The Commission for the Financial Market (CMF) in Chile published capital adequacy ratios (as of February 2022, January 2022, and December 2021) for 17 banks and for the banking system.
PRA Issues Statement on NPEs and Policy on Trading Activity Wind-Down
The Prudential Regulation Authority (PRA) issued a statement on the European Banking Authority (EBA) guidelines on management of non-performing exposures (NPEs) and forborne exposures.
