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Greening financial regulation initiative

Why we need to green financial regulation
Rapid biodiversity decline is fueling economic and financial risks
The unprecedented rate of climate change and environmental degradation is undermining key ecosystem services and natural resources on which our economic system depends.  

Finance can be a powerful tool for shaping a healthy economy if our global financial system evolves to respond to these significant financial risks. Monetary policy and financial regulation instruments need to mitigate the significant financial and price instability caused by biodiversity loss and global warming and will continue to increase if no action is taken now. Therefore, regulators, central banks and financial supervisors must support the transition to a sustainable planet and a healhy, "nature-positive" econony.  Nature-positive refers to the WWF and World Economic Forum (WEF) definitions, indicating that there needs to be more nature in 2030 than in 2020, that at least 30 % of land and oceans are protected, the footprint of our production and consumption is halved by 2030, and that there cannot be any offsetting.
 
Financial institutions worldwide are now considering what measures they can introduce to integrate climate risks into their operations and how these measures can be successfully implemented.

However, biodiversity loss and ecosystem degradation are environmental risks that are not well recognized or acknowledged yet.

Climate change and biodiversity loss are inherently linked to the core mandates of central banks and supervisors and should be at the forefront of risk assessments and investment impact metrics. 
 

Call to Action to Ensure Transition to a Net Zero and Nature Positive Economy

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Credible private sector transition plans are a crucial for accelerating action on climate change and nature loss.

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What we are doing
Putting climate and environmental risk at the heart of the financial system

We are working to evidence the link between financial and environmental risks like climate change, water scarcity and biodiversity decline, and engage policy makers, central banks and financial supervisors on the need to integrate those risks into their mandates and operations.

We advocate a precautionary approach to these risks. And we provide the necessary tools, scientific research, assessments, and assistance to help enhance ambitions on the sustainable financial global policy agenda.

1) We regularly track how central banks and supervisors are making progress on the integration of climate, environmental and broader social considerations in their mandates and operations via our best practice online platform SUSREG.

2) We undertake research, capitalizing on in-house expertise and external partners.

3) We offer targeted assistance, trainings and workshops to individual financial supervisors, central banks and policy makers delivering regular overviews which are backed up by scientifically based data, tools and methodologies. 
 

For more information, please contact: gfr@wwf.ch 

 

WWF´s GFRI engages central banks, financial supervisors and regulators on the need to integrate climate and environmental risks into their mandates. More info here.