International agency seeks comment on recommendations for reporting, collection of climate-related financial data

Recommendations for the reporting and collection of climate-related financial data was published Friday by the group representing financial institution regulators from around the world.

The Financial Stability Board (FSB) said the recommendations will be open for comment until June 30.

The FSB’s report — Supervisory and Regulatory Approaches to Climate-related Risks – is aimed at assisting supervisory and regulatory authorities in developing their approaches to monitor, manage and mitigate risks arising from climate change and to promote consistent approaches across sectors and jurisdictions, the FSB said.

“A more consistent global approach to addressing climate-related risks will help to better assess and mitigate financial vulnerabilities and to reduce the risk of harmful market fragmentation,” the agency said.

The report examines three key areas: Supervisory and regulatory reporting and collection of climate-related data from financial institutions; incorporating systemic risks into supervisory and regulatory approaches; and early considerations on other macroprudential tools and policies.

The FSB said the report, by focusing on cross-sectoral and system-wide aspects of climate-related financial risks, complements the standard-setting bodies’ ongoing work on approaches to addressing climate-related financial risks for their respective sectors. “In addition, as climate change is likely to represent a systemic risk for the financial sector, potential macroprudential tools or approaches would complement microprudential instruments,” the report states.

The FSB coordinates the work of national financial authorities standard-setting bodies internationally to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies.

Supervisory and Regulatory Approaches to Climate-related Risks; Interim Report