Transparency about climate-related risks

At the end of May 2021, FINMA clarified the disclosure requirements in the area of climate-related financial risks for significant financial institutions. These disclosure requirements came into force on 1 July 2021 and institutions must comply with them since 2022. Specific disclosure requirements will deliver greater transparency and comparability of climate-related risks of the institutions concerned.

The requirements are generally principle-based and proportionate. Their application is limited to the most significant financial institutions (institutions in supervisory categories 1 and 2). Their content is based on the internationally widely recognised recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Subsequently, the largest banks and insurance companies must describe their material climate-related financial risks and their impact on their business strategy, business model and financial planning. They must also disclose the process for identifying, measuring and addressing these risks (risk management) as well as quantitative information, including a description of the methodology used. Finally, institutions have to describe the core characteristics of their governance structure in relation to climate-related financial risks. The actual wording of the specific requirements can be found in the disclosure circulars linked below.

As indicated in the consultation on the disclosure requirements, FINMA will conduct an ex-post evaluation to identify whether and to what extent future adjustments to disclosure practice are appropriate. This evaluation will be carried out in 2024 and will take into account the various developments in the area of climate and sustainability reporting.