Today I will concentrate on one topic––climate––and what I believe to be the critical factors needed to ensure that climate finance has a solid foundation in regulation.
For some time, regulators have drawn attention to problems with the consistency, availability and reliability of the information needed for investors to incorporate climate into their decisions. This goes hand-in-hand with concerns about greenwashing.
More recently, there has been a substantial increase in the amount of publicly-available climate-related corporate information, standards and ratings. This has made it even harder to make sense of what has become another form of information overload.
The good news is that we are now seeing meaningful progress in efforts by regulators to help make sense of so much noise in the system.
The Network of Central Banks and Supervisors for Greening the Financial System was an early mover, issuing guidance for supervisors to consider climate and environmental risks lurking in banking and insurer balance sheets.
And only a few days ago, the G7 was the latest organisation to recognise the urgent need for a globally-consistent corporate reporting standard for sustainability. Its communique explicitly supported the important move by the IFRS1 Foundation to establish a new Sustainability Standards Board to achieve this.
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