FSB Floats Recommendations for Climate Risk Reporting

As regulators around the world work to establish structures for determining and alleviating climate-related threats, the Financial Stability Board today released suggestions for the reporting and collection of climate-related monetary information. The FSB will accept discuss the suggestions up until June 30.

“As authorities continue to evaluate their information needs and move towards regular standardized regulatory reporting requirements, key policy considerations include: the expansion of regulatory returns to gather more granular and specific climate-related data on a regular basis; capacity building including upskilling staff and developing analytical tools; information system capabilities; and proportionality, taking into account the nature, size, and risk profile of a financial institution,” the FSB kept in mind.

Specifically, the FSB advised that regulators work rapidly to recognize the kinds of details they will require to examine and keep an eye on for environment threat; develop supervisory expectations attending to banks’ governance, procedures and controls with regard to climate-related information reporting; and think about utilizing typical meanings—such as those proposed by standard-setting bodies—to specify environment risk-related terms.

The FSB likewise kept in mind that to the degree that regulators need more particular climate-related details to fulfill their supervisory and regulative goals “above and beyond public disclosures,” they ought to start by asking banks to report “qualitative information supplemented with increasingly available quantitative information,” and ought to transfer to greater reporting requirements and requirements as more robust information appears. Finally, FSB required worldwide coordination and cooperation as environment threat reporting structures are established.


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