Sustainable Financial Regulations and Central Bank Activities (SUSREG) Annual report

"Putting climate and environmental risk at the heart of the financial system." WWF has published a new report highlighting key findings from its SUSREG assessment 2022 which evaluates progress on sustainable financial regulations and central bank activities in 44 jurisdictions. Together, they represent over 88% of the global GDP, 72% of global GHG emissions and 11 of the 17 most biodiversity-rich countries in the world. Overall, the assessment finds that despite progress by a number of front-running countries (which majority are members of the NGFS), there are too many important gaps that hinder the transition to a nature positive, net zero economy. This year's assessment looked at the performance of central banks and supervisors, including for the first time, the insurance sector. With US$ 30 trillion in assets under management and US$ 5 trillion in world premium volume, the insurance industry holds around a third of global economic assets and liabilities on their balance sheets. Findings show some positive developments on sustainable banking and insurance regulation and guidance, as well as on disclosure/reporting are taking place in progressive jurisdictions: -88% of the jurisdictions issue banking regulations and supervisory expectations that take into account climate risks (79% for insurance regulation). Climate considerations are increasingly expected to be integrated in financial institutions’ business strategies as well as in risk management decision making processes and policies. However, broader environmental risks, including on nature loss, are still falling short. -There is a growing requirement for mandatory climate disclosure of the risks from the impacts of climate change and the transition to a low-carbon economy (83% require climate disclosure from banks). But broader environmental-related disclosure is lagging behind. Measurement and transparent reporting alone is insufficient to achieve change at the scale and speed required. -Central banks and financial supervisors are increasingly publishing climate and sustainability strategies and roadmaps. -However many do not have time-bound transition plans in place. Credible, ambitious mandatory transition plans are crucial to accelerate climate mitigation, halt and restore nature loss. \- Lubomila Jordanova on LinkedIn