On 18 July 2024, the Financial Stability Board (FSB) issued a report providing a stocktake of member financial authorities’ initiatives related to the identification and assessment of nature-related financial risks.
The report draws on a survey of participating FSB members and the work done by international organisations on nature-related risks. It summarises current and planned regulatory and supervisory initiatives, and presents the key challenges for authorities in identifying, assessing and managing nature-related financial risks. The report also includes some case studies on initiatives by authorities and international organisations.
Among other things the report notes that those embarking on analytical work face major data and modelling challenges and in particular there is a lack of reliable and consistent data on financial exposures to nature risks. Regulatory and supervisory work is also at an early stage globally, and approaches differ considerably across jurisdictions and institutions. Supervisory guidance, where it exists, typically covers nature-related risks as part of an overall focus on environmental risks, including climate, and specific guidance on nature-related risks is often less detailed than on climate-related risks.