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Tackling climate change: The role of banking regulation and supervision report
- Based on a survey of 33 central banks and regulatory authorities across the world, the report shows that most respondents now see climate risks as an important issue and acknowledge that a long-term response is needed. Central banks now see climate change as ‘major threat’ to financial stabilityThe report finds that 70% of survey respondents consider climate change a major threat to financial stability and will integrate climate risks into supervisory practices and routine stress tests.Just over half of central banks (55%) say they are monitoring climate risks, and a further 27% say they are actively responding to them. But there is disagreement over responsibilities, with 12% overall saying that, while they see climate change as a major risk, action should come from other policy institutions, such as government departments.Regulatory approaches to climate risksCentral banks and regulatory authorities are increasingly integrating climate risks into their activities. Moving ahead, top measures expected are:
- Assessing climate risk as a financial risk in stress tests
- Encouraging or mandating climate-related financial disclosures
- Setting sustainability criteria standards for green finance/lending by regulated banks
Taking collective responsibility
Mazars and OMFIF believe that the success of any policy response will rely on the engagement of all market participants. Encouragingly, collaboration has already started between regulators and the private sector through various initiatives. With this survey, we hope to engage financial services leaders in a constructive dialogue and ignite conversations on how to best shape the green regulatory agenda or respond to changes in the regulatory field. Taking collective responsibility for creating the new foundations of a sustainable financial industry will contribute to building healthier economies and a fairer world – an ambition that sits at the heart of Mazars’ purpose.
CLICK HERE TO DOWNLOAD THE FULL REPORT, “TACKLING CLIMATE CHANGE: THE ROLE OF BANKING REGULATION AND SUPERVISION”.
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