Integrating climate-related risks into supervisory practice

FINMA oversees the adequate capture and management of significant climate-related risks by financial institutions. It maintains a dialogue with the supervised institutions to do this. At the same time, FINMA develops the necessary instruments for appropriate supervisory activity in the area of climate risks and continuously updates them.
FINMA is committed to ensuring that the supervised institutions manage climate-related risks adequately. It is primarily the responsibility of the institutions to identify and mitigate these risks and to refine their risk management accordingly. The approach here is generally comparable with other risk drivers and is designed to be risk-driven and proportionate.

Measures currently implemented by FINMA include in particular continuing its dialogue with the largest supervised entities about how to manage their climate-related financial risks, developing and enhancing supervisory concepts for monitoring climate risk management at banks and insurers, and comprehensively analysing quantitative measurement methods relating to climate-related financial risks.

Overall, financial institutions and supervisory authorities worldwide are still in the process of developing established practice in the area of climate-related risks. In particular, they are working to develop and deploy suitable approaches and tools for measuring and mitigating risks, as well as to ensure the transparent disclosure of the corresponding risks. International cooperation also plays a pivotal role here.