Dossier on Sustainable Finance

FINMA’s mandate includes protecting financial market clients and investors from improper business conduct, in particular from deception. FINMA’s primary objective in relation to greenwashing is to ensure that clients and investors are not misled.

The impact of climate change and other nature changes can entail significant financial risks for financial institutions. The main focus is on the sort of physical risks that arise from the changes themselves, as well as transition risks related to mitigation and adaptation measures. Financial institutions have to identify their material climate- and other nature-related financial risks and manage them appropriately.

FINMA oversees the adequate capture and management of material nature-related financial risks, including climate-related financial risks, by financial institutions. It maintains a dialogue with the supervised institutions for this and formulates corresponding supervisory expectations. At the same time, FINMA develops the necessary instruments for the appropriate integration of these risks into ongoing supervisory activities and continuously updates them.

Transparency about climate-related financial risks at supervised institutions is an important step towards the rational identification, measurement and management of these risks. At the end of May 2021, FINMA therefore clarified the disclosure requirements in the area of climate-related financial risks for significant financial institutions and communicated them in disclosure circulars.

Climate and other nature risks for financial institutions and the financial system, as well as investor protection in connection with sustainability topics, are priority issues at the most important international standard-setting bodies in the financial market sector. FINMA welcomes the development of internationally coordinated solutions and is actively involved in this work.