IIF Statement on FSOC Climate Report

Institute of International Finance (IIF) Managing Director and Head of Regulatory Affairs Andrés Portilla has issued the following statement on the report from the Financial Stability Oversight Council (FSOC) on climate-related financial risks and financial stability, issued Oct. 21:

“IIF welcomes the FSOC report and its clear recognition that climate change has significant implications for financial stability. We strongly support the report’s recommendation that financial regulators properly assess and develop a greater understanding of the impact of climate-related risks on financial stability. We also agree with the report’s recommendation to enhance climate-related data availability and coordination across federal agencies and with international counterparts, and the need for standardization of terminology, metrics and definitions. All these recommendations will support greater international alignment on climate-related risk assessment and disclosure—a key goal articulated this year by the G20, the G7 and the FSB, and a central topic at the upcoming COP26 environmental summit.”

“The report highlights the importance of adequately assessing the implications of climate risk on the financial sector. In this regard, the financial industry has made tremendous progress in understanding climate-related risks and incorporating them into risk management approaches and disclosure practices—which in turn supports corporate clients in their transition to more sustainable business models and a net-zero future.”

“IIF echoes the call for greater clarity regarding supervisory expectations on climate risk management. We stand ready to contribute to prudential authorities’ efforts to develop principles-based guidance. As expressed by our Board of Directors in February, such guidance should be coordinated at the international level through global standard-setting bodies to increase alignment and comparability across markets. This will enable the international financial community to intermediate the trillions of dollars needed to meet the goals of the Paris Agreement.”

About the Institute of International Finance (IIF)

The Institute of International Finance (IIF) is the global association of the financial industry, with more than 450 members from more than 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. IIF members include commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks. To learn more about IIF, please visit www.iif.com, follow IIF on Twitter, LinkedIn or YouTube, or check out IIF’s podcasts.

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