On 13 July 2023, the Financial Stability Board (FSB) published its 2023 progress report on the Roadmap for addressing climate-related financial risks.

In July 2021 the FSB published a Roadmap to address climate-related financial risks which was endorsed by G20 Finance Ministers. The Roadmap addressed the need for coordinated action with a large number of international initiatives underway by outlining key actions to be taken by standard setting bodies and other international organisations over a multi-year period in four key policy areas: firm-level disclosures, data, vulnerabilities analysis, and regulatory and supervisory practices and tools.

The FSB published its first annual Roadmap progress report in July 2022.

This second progress report takes stock of further progress since the July 2022 progress report, identifies and addresses areas requiring further attention, strengthens coordination across the different international initiatives and provides updates where needed to the detailed Roadmap actions (set out in the Annex to the progress report).

Among other things the progress report provides that steady progress has been made across all four blocks of the Roadmap:

  • Firm level disclosures: The publication by the International Sustainability Standards Board (ISSB) of its final standards, IFRS S1 on general sustainability-related disclosures and IFRS S2 on climate-related disclosures, is a substantial achievement. The FSB has asked the ISSB to take over from the Task Force on Climate-related Disclosures, the monitoring of the adoption of climate-related disclosures by firms. Next steps include promoting interoperability, in order to avoid firms’ double reporting and the development of a global assurance framework for sustainability-related corporate reporting to drive reliability of the disclosures.
  • Data: Work has continued to focus on improving the availability, quality and cross-border comparability of climate data. An important goal is to develop global repositories that provide open access to data and would facilitate the use of metrics that reflect climate-related risks consistently and reliably across sectors and jurisdictions. Further work is also needed to develop metrics that measure climate-related risks in a forward-looking manner.
  • Vulnerabilities analysis: Progress is being made on the development of conceptual frameworks and metrics for monitoring climate-related vulnerabilities. Further work is needed to embed climate scenarios in the monitoring of financial vulnerabilities and to develop understanding of the cross-border and cross-sectoral transmission of climate shocks in order to obtain financial stability insights.
  • Regulatory and supervisory practices and tools: Initiatives on embedding climate-related risk into risk management and prudential frameworks are ongoing and capacity building remains an important focus. The FSB is setting up a working group that will, as an initial task, develop a conceptual understanding on the relevance of transition plans and planning by financial and non-financial firms for financial stability.