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. During the year under review, FINMA expanded its supervisory activity in relation to the major climate-related financial risks affecting Swiss financial institutions with the aid, inter alia, of a heat map. […]
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. The results were used to generate the following heat maps for the banking and insurance sectors, which FINMA will refine further in the future. FINMA uses these heat maps as a basis for addressing the issue of climate-related financial risks with the representatives of the supervised institutions.
The climate-related financial risks affecting Swiss banks and insurers can be divided into physical risks and transition risks . […]
Further information and explanations concerning the individual financial risks for banks and their positioning in the heat map can be found in the Annual Report 2020 (p. 38).
Further information and explanations concerning the individual financial risks for insurers and their positioning in the heat map can be found in the Annual Report 2020 (p. 40).