Supervision of nature-related risks

FINMA is committed to ensuring that supervised institutions adequately manage climate and other nature-related financial risks. The primary responsibility for identifying these risks and further developing risk management lies with the institutions themselves. The approach is broadly comparable to that applied to other risk drivers and is designed to be risk-based and proportionate. FINMA’s measures are based on the requirements and guidelines of international standard-setting bodies such as the Basel Committee on Banking Supervision (BCBS) and the International Association of Insurance Supervisors (IAIS) as well as the non-binding NGFS recommendations.

To monitor the risk management of banks and insurers, FINMA pursues in particular the following measures:

New circular on climate-related and other nature-related financial risks

In December 2024, FINMA published the new circular on “Nature-related financial risks”, thereby specifying its supervisory practice for the management of climate-related and other nature-related financial risks. In doing so, it adopted an integrated approach to climate risks and other nature-related risks, with a focus on financially material risks. The circular applies to banks and insurers and enters into force in stages from 1 January 2026. The aim of the circular is to strengthen the resilience of supervised institutions to these risks and thus also protect their clients and the Swiss financial centre. The circular implements the current recommendations of the international standard setters, in particular the BCBS and the IAIS, as well as parts of the NGFS recommendations.

Differentiated supervision and feedback to financial institutions

FINMA supervises compliance with these expectations in a risk-based and proportionate manner, focusing in particular on large or especially exposed institutions. To this end, FINMA relies on traditional supervisory instruments, such as on-site inspections, targeted data collections (see below) and comparative analyses, to identify outliers. Other focal points include FINMA’s own analyses of nature-related financial risks for the Swiss financial market, as well as additional, targeted climate scenario analyses. In addition, good practices for implementing the circular are to be published in the future to support financial institutions.

Strengthening the data basis for assessing climate risks

Like the supervised institutions, FINMA also needs data to assess climate risks. Since 2024, regular data collections on climate risks have been conducted for larger institutions (supervisory categories 1 to 3), covering various characteristics and transmission channels of these risks. This also serves as an important basis for fulfilling FINMA’s reporting obligation on climate risks, as set out by Parliament in the CO2 Act. It is also envisaged that participating institutions will receive individual feedback based on the data collection. 

Practice continues to evolve

Overall, financial institutions and supervisory authorities worldwide are still in a process of developing an established practice in the area of climate-related and other nature-related risks. In particular, they are working to develop and implement appropriate approaches and instruments for measuring and mitigating these risks. International cooperation is also playing a key part in this context.