Global regulators published a blueprint on Wednesday to give a "sense of direction" to proliferating initiatives for tackling climate-related financial risks before they fragment markets.
The Financial Stability Board (FSB), which coordinates financial rules for the G20 group of nations, said its "roadmap" seeks to coordinate approaches to disclosures by companies and plug gaps in the data needed to spot financial stability "vulnerabilities" and develop tools to address them.
The roadmap attempts to align rules still in the planning stage between now and 2023 to avoid more divergences between various measures for the same activity.
A patchwork of disclosure methods have prompted a global regulatory initiative to set up an International Sustainability Standards Board (ISSB) to give cross-border investors consistent information.
"The time has come to take this to the next level and ensure that we avoid harmful market fragmentation," said Randal Quarles, the U.S. Federal Reserve Vice Chair who also chairs the FSB.
It was important to guard against inconsistent requirements that later on will be very hard to correct, he said.
Differences in company disclosure approaches are likely to remain, despite pleas from international investors.
The EU, an FSB member, is requiring companies to say not only how climate change will affect their performance but also how companies themselves impact the environment, a step too far for many countries.
The bloc set out further measures this week that could break new ground in measuring risks from climate change.
"This will ensure the European Union remains the global leader in sustainable finance and this will help bring the rest of the world with us," the EU's financial services chief Mairead McGuinness said.
The FSB is asking G20 finance ministers and central bankers meeting in Italy this week to back the roadmap so that all financial risk decisions appropriately take account of climate change. It will report to the G20 each year on progress in coordinating climate-related risks.
(Reporting by Huw Jones, Editing by William Maclean)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU