United Nations Environment Programme
Climate risk management tools for financial institutions – UNEP FI issues three reports – 17 February 2021
The United Nations Environment Programme Finance Initiative (UNEP FI) has issued the following three reports on climate risk management tools for financial institutions:
- Pathways to Paris: A practical guide to climate transition scenarios for financial professionals, which examines the driving assumptions and sectoral coverage of the models used to produce climate scenarios, as well as the benefits and limitations of using these pathways;
- Decarbonisation and Disruption: Understanding the financial risks of a disorderly transition using climate scenarios, which highlights the ways in which many sectors are exposed to transition risk; and
- The Climate Risk Landscape: A comprehensive overview of climate risk assessment methodologies, which provides a summary of the various tools and analytics available, an assessment of their key characteristics and looks at the potential technological and regulatory developments that will shape climate risk tools over the coming years.
An accompanying press release explains that the guidance is the result of a project that brought together 39 banks to pilot the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD), building on previous UNEP FI work.
Pathways to Paris: A practical guide to climate transition scenarios for financial professionals
Decarbonisation and Disruption: Understanding the financial risks of a disorderly transition using climate scenarios
The Climate Risk Landscape: Mapping Climate-related Financial Risk Assessment Methodologies
Press release
International Regulatory Strategy Group
Digital operational resilience – IRSG publishes response to European Commission’s legislative proposal – 18 February 2021
The International Regulatory Strategy Group (IRSG) has published its response to the European Commission’s September 2020 legislative proposal for a Regulation on digital operational resilience for the financial sector (DORA). The response summarises a number of key concerns with the legislation as proposed. It can be split into the following three themes:
- ensuring sufficient flexibility for requirements to be applied appropriately by each of the broad range of entities to which they apply;
- avoiding overlap, duplication and contradictions caused by the application of the DORA requirements in conjunction with existing legislation and guidance; and
- identifying practical issues arising from specific requirements in the draft legislative proposal.
One concern relates to the designation process and criteria for critical third-party service providers (CTPPs) which needs to be sufficiently transparent, clear and consistent so potentially designated firms have time to comply with the Regulation.
IRSG response to the European Commission’s legislative proposal for a Digital Operational Resilience Act
Webpage
European Systemic Risk Board
COVID-19 – ESRB publishes report on financial stability implications of support measures to protect real economy – 16 February 2021
The European Systemic Risk Board (ESRB) has published a report on the financial stability implications of various support measures to protect the real economy from the effects of COVID-19. The report was produced by the ESBR Working Group, established in June 2020. It provides a framework for monitoring financial stability implications of relevant measures taken to date, and illustrates some initial results and policy findings. According to the report, any spill-over from the real economy to the financial system has so far been contained. It recommends that authorities focus on enhancing financial institutions’ balance sheet transparency and upgrading reporting, co-ordinating policies across policy areas and countries. Authorities also need to strike the right balance to ensure that fiscal support is not withdrawn too soon or maintained for too long.
ESBR report on financial stability implications of support measures to protect the real economy
Press release
Infographic
HM Government
Green Finance and Investment – Government announces UK Centre – 16 February 2021
The government has announced its new UK Centre for Greening Finance and Investment (CGFI), with physical hubs based in Leeds and London. The CGFI will begin work in April 2021 and comprise a consortium of UK institutions including the University of Leeds, the University of Bristol, the University of Reading, Imperial College London, the Alan Turing Institute, the Satellite Applications Catapult, and the Science and Technology Facilities Council. The University of Oxford will lead the consortium.
The research hubs in Leeds and London will provide data and analytics to global financial institutions and services such as banks, lenders, investors and insurers.
The announcement of the CGFI follows on from commitments made by the Prime Minister in November 2020’s Ten Point Plan for a green industrial revolution.
Press release announcing CGFI
Financial Conduct Authority
COVID-19 – FCA consults on extension of guidance relating to cancellations and refunds – 12 February 2021
The FCA has published a guidance consultation on cancellations and refunds to help consumers with rights and routes to refunds, aimed at insurers, and credit and debit card firms. It follows the earlier temporary guidance, published on 2 October 2020 and due to expire on 2 April 2021, in which the FCA set out its expectations on the reduction of consumer confusion and frustration and the provision of information. The FCA is proposing that the guidance should remain in place beyond 2 April 2021 during the exceptional circumstances arising out of COVID-19, until varied or revoked.
The consultation closes on 26 February 2021.
FCA consultation
FCA cancellations and refunds guidance webpage
