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

    Related Articles
    News

    UK Government to Set Out Rules on Wind-down of Critical Benchmarks

    HM Treasury notified that, after considering all responses, the government intends to bring forward further legislation, when the Parliamentary time allows, to address issues identified in the consultation on supporting the wind-down of critical benchmarks.

    May 07, 2021 WebPage Regulatory News
    News

    EIOPA Launches Stress Test for Insurance Sector in EU

    EIOPA launched the 2021 stress test for the insurance sector in EU.

    May 07, 2021 WebPage Regulatory News
    News

    UK Authorities Publish Third Edition of Regulatory Initiatives Grid

    UK authorities jointly published the third edition of Regulatory Initiatives Grid setting out the planned regulatory initiatives for the next 24 months.

    May 07, 2021 WebPage Regulatory News
    News

    EC Consults on Regulation on Non-Financial Sustainability Disclosures

    EC is requesting feedback on the proposed Commission Delegated Regulation on the content, methodology, and presentation of information that large financial and non-financial undertakings should disclose about their environmentally sustainable economic activities under the Taxonomy Regulation.

    May 07, 2021 WebPage Regulatory News
    News

    OSFI Outlines Prudential Policy Priorities for Coming Months

    OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.

    May 06, 2021 WebPage Regulatory News
    News

    BIS Announces TechSprint on Innovative Green Finance Solutions

    Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.

    May 06, 2021 WebPage Regulatory News
    News

    ACPR Publishes Version 1.0.0 of RUBA Taxonomy

    ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.

    May 06, 2021 WebPage Regulatory News
    News

    EBA Proposed Regulatory Standards for Central Database on AML/CFT

    EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.

    May 06, 2021 WebPage Regulatory News
    News

    ECB Responds to EC Consultation on Crisis Management Framework

    ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.

    May 06, 2021 WebPage Regulatory News
    News

    BCBS, CPMI, and IOSCO to Survey Market Participants on Margin Calls

    BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.

    May 05, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6942