This report by the NGFS sets out climate change-related risks as a source of financial risk and outlines six recommendations, particularly for central banks and financial supervisors to take initial steps to ensure the stability of the financial system. The report aims to build knowledge in the main gaps of identifying, measuring and managing climate risks in the financial system.
The recommendations are:
- Integrate climate-related risks into financial stability monitoring and micro-supervision
- Integrate sustainability factors into own-portfolio management
- Bridge the data gaps
- Build awareness and intellectual capacity and encouraging technical assistance and knowledge sharing
- Achieve robust and internationally consistent climate and environment-related disclosure
- Support the development of a taxonomy of economic activities
The NGFS was set up in December 2017 by eight central banks and supervisors to boost the climate resilience of the financial system and enhance members' understanding of environmental risks more broadly. By April 2019 NGFS membership had expanded to 34 banks and financial supervisors.