In guidance, the Swiss Financial Market Supervisory Authority FINMA draws attention to relevant developments in the area of climate-related financial risk management. FINMA reiterates its expectation that supervised institutions establish an appropriate climate risk management framework based on recognised practices. For its part, FINMA will continue to develop its expectations regarding the management of climate risks based on its supervisory experience and in line with relevant international developments.
Relevant international developments are currently taking place in the area of climate-related financial risk management. International standard-setting bodies are developing concrete recommendations and guidance for dealing with such climate risks. Both BCBS and IAIS expect banks and insurers to manage their climate risks effectively – in the same manner as applies to all other risks – including in areas such as governance, risk management or disclosure.
FINMA reiterates its expectation that supervised institutions establish an adequate framework for managing climate risks that is adapted to the respective risk profile of the institution. In this context, FINMA expects the supervised financial institutions to proactively engage with the recommendations and guidance provided by international bodies as well as relevant best practices in the market and to further develop their tools and processes where necessary.
For its part, FINMA will continue to develop its supervisory practice for assessing the management of climate-related financial risks. In doing so, it will take into account the work of the standard-setting bodies. Where appropriate and necessary, FINMA will specify what it expects from supervised institutions in terms of climate risk management.