Martin Arnold opined in the Financial Times on 31 May that regulators are “stepping up pressure (for) banks to tackle climate risk.” His opinion cited several examples of how the regulatory pressure has increased over the last several years – including a focus on how climate risks need to included when looking at safety and soundness of banks. The issue of safety and soundness is important as banks face financial losses both through climate change leading to disastrous weather conditions (flooding, drought, etc.) and through providing financing to companies for assets that lose their value (oil exploration, fossil fuel automobiles, etc.).
These issues were reinforced in a discussion on 1 June which I moderated. A panel of four experts on sustainability issues joined me for a roundtable organised by IFN to discuss the future of sustainable finance. Clearly sustainable finance is no longer a fringe issue for banks but has moved to the core of the issues which banks must address to be successful.
