FINMA is addressing the subject of climate-related financial risks as part of its supervisory remit. It is also reviewing regulatory measures to increase transparency regarding such risks in the financial system. In addition, it is focusing on the risk of greenwashing in the provision of financial services and the distribution of financial products.
FINMA is monitoring the situation to ensure that financial institutions are taking the necessary action to adequately identify and address these risks. Under the applicable law, financial institutions are subject to a general obligation to identify, assess and adequately address significant climate-related financial risks and, where necessary, further develop their instruments and processes accordingly.
For the Swiss financial market, FINMA has prepared an initial qualitative assessment of the climate-related financial risks and placed these in relation to each other based on their probability of occurrence and the financial impacts they would have in the event of an occurrence.
Climate change could give rise to significant longterm risks for financial institutions. Transparency by supervised entities about their climate-related financial risks is a first important step towards identifying, measuring and managing these risks.
FINMA continues to see climate risks as a longer-term risk for the Swiss financial-services industry. It is addressing the topic systematically and is currently analyzing those areas among the Swiss institutions subject to supervision that might be exposed to elevated climate-related risks.
Sustainable finance has gained considerable significance in recent years. The topic covers a broad range of environmental, social and governance issues. Green finance focuses on how the business world is dealing with climate change.
FINMA has also identified risks that could have an impact on the Swiss financial centre over the longer term. These include risks relating to climate change, which we explore in more detail below.