.jpg)
Yesterday FI submitted a report to the Government about how climate change may affect financial stability.
“Climate change will impose significant changes on our economic and financial systems. In the long-run this could introduce risks to the financial system. FI will therefore work to improve awareness in the financial sector about these risks,” says FI Director General Erik Thedéen.
FI conducted an analysis on behalf of the Government, and its report is primarily based on a commissioned report written by two researchers at Grantham Research Institute in London.
It is FI’s opinion that climate change does not currently constitute a major threat to financial stability. These risks may increase over time, however, and the existing data set on which this opinion is based is far from comprehensive.
FI is therefore highlighting the need for more information and transparency related to climate risks – in communication with customers, the market and authorities. This is similar to one of the conclusions drawn in an FI report published in November 2015 regarding the scope of environmental and sustainability considerations present in banks’ lending practices.
The report also highlights the importance of becoming more knowledgeable about how climate-related risks could affect financial companies and the financial system.
“Companies need to develop stress tests and scenario analyses to capture how vulnerability can be expressed in more concrete terms and provide indications of when different preventive measures may need to be introduced,” says Erik Thedéen.
FI intends to present its proposals for how the financial sector can contribute to sustainable development in a report that will be published later in the year.
