Sustainability is a significant challenge for the financial markets, which is why FINMA, as the supervisory authority, is also actively addressing this issue. In line with its mandate, FINMA’s focus is on the associated potential financial risks and client protection issues.
The impact of climate change can entail significant financial risks for financial institutions in the longer term. The main focus is on physical risks that arise from climate change, as well as transition risks related to the decarbonisation process in the economy. Financial institutions have to identify their significant climate-related financial risks and manage them appropriately.
FINMA oversees the adequate capture and management of significant climate-related risks by financial institutions. It maintains a dialogue with the supervised institutions to do this. At the same time, FINMA develops the necessary instruments for appropriate supervisory activity in the area of climate risks 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.
FINMA’s mandate includes protecting financial market clients and investors from improper business conduct, in particular from deception. FINMA’s primary objective in preventing greenwashing is to ensure that clients and investors are not misled.
The risks related to climate change to 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.