The SBA supports the disclosure of climate risks
Achieving greater transparency for climate-related financial risks is an important step in building a sustainable Swiss financial centre. Disclosing climate risks in line with international standards, applying proportionate and principle-based rules, and involving the real economy: these are all good approaches in the opinion of the Swiss Bankers Association (SBA). In their official response to FINMA’s consultation procedure, the SBA therefore backs the proposal concerning disclosure of climate risks.
- The SBA takes a positive view of the proposal to tailor regulation to the internationally established and globally recognised framework of the Task Force for Climate-Related Financial Disclosures (TCFD).
- Another important aspect is the proposal that implementation of the regulation on disclosure must be proportionate and principle-based. This sound approach allows every systemically important bank to implement the rules in accordance with their individual size, structure, complexity, business activity and risks. It ensures rapid, straightforward and flexible implementation, particularly during the initial introduction stage.
- Finally, the involvement of the rest of the economy in disclosure is crucial, as financial institutions can only then carry out a meaningful quantification of their climate-related risks once reliable third-party data is collated. However, sufficient data is not always available. The Federal Council has therefore called on Swiss companies from all business sectors to begin implementation of these recommendations on a voluntary basis.
The monitoring of climate-related risks and their quantification are effective measures to facilitate the rapid and efficient disclosure of climate-based exposures. Disclosure of these financial risks, and the accompanying rollout of a technical standard as a regulatory instrument, are steps in the right direction.
Big banks in categories 1 and 2 already apply standards such as TCFD on a voluntary basis. Voluntary disclosure compliant with the TCFD framework is becoming far more common. In accordance with its sustainable financial policy, the Swiss government gave its official support on 12 January 2021 to the TCFD working group on climate reporting. The SBA also backs this position.