Swiss financial regulator FINMA has said that, going forward, re/insurance companies and banks will be required to publicly provide “qualitative and quantitative information” on the risks they face due to climate change.
FINMA said the move will support the sustainable development of the Swiss financial centre, while preventing the public from being misled about a product’s sustainable characteristics.
Taking effect on July 1, the mandate will follow the introduction of similar requirements by the European Central Bank, which last year announced plans to ask lenders in the 19-country currency union to disclose their climate-related risks.
Specifically, FINMA has said that insurers should “describe the major climate-related financial risks and their impact on the business strategy, business model and financial planning (strategy).”
In addition, they must disclose the process for identifying, assessing and managing climate-related financial risks as well as quantitative information on their climate-related financial risks.
Finally, insurers must describe the central attributes of their governance structure in relation to climate-related financial risks.
The requirements were deemed necessary following dialogue last year with industry representatives, academics, NGOs and the federal authorities on transparency rules in relation to climate risks, FINMA explained.