Switzerland's biggest financial services firms will be subject to climate risk guidelines. The Swiss regulator detailed its plans and signaled it will apply them to a wider patch of firms.
Finma will require the largest Swiss banks and insurers to report on potential climate risks related to its business, from June 1, it said in a statement on Monday. The Bern-based regulator said its primary aim is transparency.
Specifically, financial service providers must describe major climate-related financial risks and their impact on business strategy, model, and financial planning and disclose how they identify, assess, and manage them, Finma said. It also wants to know how the matter is governed internally.
Widened Requirement?
The transparency rules apply to the largest two categories of insurance companies and banks. Finma's use of the word «initially» in the press release indicates the regulator plans later to extend the requirement to smaller financial firms as well.
UBS and Credit Suisse have included climate risks in their reporting since 2019. «Disclosure of environmental, social and corporate governance is coming, and it will have an impact on the banks just as much as the real economy,» Hans-Ruedi Mosberger, head of asset management and sustainability at the Swiss Bankers Association, told finews.com earlier this month.
Swiss Vote Looms
The World Wildlife Fund – WWF – recently applauded several banks including cantonal banks in Basel, Zurich, and Bern as well as Credit Suisse, UBS, Raiffeisen as «above average» in embedding sustainability in their strategy.
In June, Swiss voters will decide on a revision of the so-called CO2 law in a referendum. It foresees a further cuts in greenhouse gases and emissions in Switzerland. If approved, Finma and the Swiss central bank will formalize Article 66 related the supervision of climate related financial risks.
