We have identified and ranked the key risks for financial services business leaders in 2024 based on market research, regulatory insights as well as our assessment of the current difficulties facing firms. We discuss in this article the key takeaways...
We have identified and ranked the key risks for financial services business leaders in 2024 based on market research, regulatory insights as well as our assessment of the current difficulties facing firms. We also highlight the changes in risk rankings...
The European Central Bank (ECB) issued the SSM supervisory priorities for the 2024-2026 cycle on 19 December 2023. They sum up what institutions under the direct supervision of the ECB should expect in terms of areas of supervision, in 2024...
In late 2023, and to coincide with COP 28, Mazars published its latest Sustainability practices survey on the progress banks and insurers have made in embedding sustainability into their businesses, our most comprehensive and information-rich report to date covering 404...
In environmental, social and governance (ESG) reporting, materiality is crucial for enhancing transparency and accountability in sustainability and climate-related disclosures. Importantly, it helps identify and report on matters that are deemed significant, emphasizing their relevance to stakeholders. Materiality comes in...
To adapt to the swiftly evolving regulatory landscape and meet stakeholders' expectations, financial firms are increasingly formulating sustainability strategies to address environmental, social and governance (ESG) factors. Notably, emissions reduction and the pursuit of net-zero targets have become central elements...
The integration of environmental, social and governance (ESG) considerations into strategic planning is increasingly becoming a common practice among financial services firms. However, climate-related risks can also serve as drivers of financial risk for institutions. These risks can manifest through...
There is growing pressure for banks and insurers to incorporate C&E factors in their risk management frameworks (RMF). As a practice, it gives the ability to set clear thresholds for the climate impacts banks and insurers are willing and able...
There are increasing regulatory expectations globally for financial institutions to disclose and demonstrate how sustainability-related responsibilities are allocated within the organisation. In this respect, the increasing global trend towards mandatory sustainability disclosure frameworks continues to underscore the significant role that...
The regulatory requirements for insurance companies are becoming increasingly complex. In this interview, Marc Böhlhoff and Thomas Volkmer, Partners at Mazars in Germany, discuss the impact of this change on the industry and delve into what it means for the operations...
The increased demand for sustainable finance shows that awareness of environmental, social and governance (ESG) issues is generally high among financial institutions. Indeed, for many of the larger players subject to the EU’s Non-Financial Reporting Directive (NFRD), there has been...
While the banking sector has shown resilience over recent years, the economic environment and geopolitical situation remain tense. So, what does this mean for risks to the banking sector? More specifically, what is the impact on capital requirements for banks...
The implementation of the European Union's 'Taxonomy' regulation, which integrates two climate objectives, was carried out on 1 January 2022 through the 'Climate' Delegated Act released in April 2021. In line with this, the banking sector has been provided with...
In 2022, the European Union implemented the green taxonomy for the second year, requiring companies to disclose indicators related to climate objectives. The green taxonomy aims to guide capital investment towards environmentally sustainable activities, making companies assess their alignment with...
The IIF Annual Membership meeting is a setting for insights and perspectives from global financial regulators and senior financial sector executives on topical economic and regulatory issues. Being a forum with global coverage means that it is a valuable setting for...
The Eurofi financial forum is a setting for exchanges between European Union (EU) economic and financial regulators and senior financial sector executives from the industry. It occurs bi-annually alongside the Economic and Financial Affairs Council configuration (ECOFIN) meetings. This summary...
ESG-related regulatory requirements, and scrutiny, show no signs of abating. Asset managers have a pivotal role in financing the transition towards low-carbon economic systems. Hence, governments have introduced several ESG-related regulatory requirements that apply to asset managers. Some examples of...
The momentum towards a low-carbon economic system is only set to grow. Financial services firms are pivotal actors in the transition; consequently, increasing demands are being put on them to demonstrate their sustainable finance activities and credentials. This blog explains...
Implementing credible environmental, social and governance (ESG) actions requires successful enablers. So how can firms identify these enablers and, crucially, remove barriers to implementation? If we take our latest C-Suite Sustainability Barometer, we can see that out of the over...
The global climate crisis has triggered the financial sphere to address the way in which it conducts business. Climate risk consideration is currently growing in the banking industry but should also be considered by banks in the Credit Valuation Adjustment...
The Federal Reserve Board (Fed) has shared instructions on its pilot climate scenario analysis exercise (CSA). Six of the largest U.S. banks, i.e., Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo are participating in the...
In our last article on sustainability-linked financing, we highlighted the accounting issues related to these contracts that are currently being debated between stakeholders. The most critical issue is the classification of loans or bonds that reference the borrower or issuer’s...
A lot of attention at COP27 was focused on the likelihood of keeping global warming to 1.5 °C, in line with the goals of the 2015 Paris Climate Agreement. The consensus was that we are in real danger of falling...
The European Central Bank (ECB) has expressed a significant supervisory concern surrounding more than half of supervised banks in terms of the progress made on fulfilling the expectations specified in the Guide on climate-related and environmental risks. The ECB recently...
As environmental, social and governance concerns are becoming more and more prevalent, sustainable finance is now under the spotlight. The financial sector has a key role to play in achieving the ESG transition. One of the levies developed by the...
The European Union (EU) has taken the first step in directing capital investments toward so-called sustainable activities with the introduction of the Green Taxonomy on 1 January 2022. For the real estate sector, the objective is to measure the share...
The Federal Reserve Board (FED) will commence its first bottom-up climate scenario analysis exercise at the beginning of 2023, as announced on 29 September. The exercise will be exploratory in nature and will not result in extra capital requirements. The...
The objective of the European Union’s Taxonomy regulation, in force since 1 January 2022, is twofold for the insurance and reinsurance sector. First, to measure the share of investments devoted to financing economic activities eligible for the taxonomy, known as...
In force since 1 January 2022, the European Union's Taxonomy regulation aims to support the market for green finance. More specifically, greater transparency in the market will help prevent greenwashing by providing information to investors about the environmental performance of...
The first supervisory climate risk stress test (2022 CST) conducted by the European Central Bank (ECB) has concluded with official results and findings made public on 8 July 2022. The exercise has complemented the broader ECB’s agenda to assess the...
Climate change is now firmly in the focus of prudential regulators and supervisors across the globe. Against this background, the European Banking Authority (EBA) is mandated to assess whether a dedicated prudential treatment of exposures related to assets or activities...
France’s innovative and incentivising Action Plan for Business Growth and Transformation (PACTE) law lays the legal foundations for corporate social responsibility. With more than 400 companies established as “sociétés à mission” – mission-led businesses – by the end of 2021,...
The European Green Deal aims to achieve climate neutrality by 2050 and create a modern, competitive and resource-efficient economy. To meet its objectives, the European Commission has begun to restructure the non-financial reporting requirements for companies. Although some of the...
As a setting for exchange between European Union (EU) economic and financial regulators and senior financial sector executives from the industry, one of the world’s largest financial services conferences, Eurofi, took place in Paris in February. Established in 2000, the...
In March 2022, the European Central Bank (ECB) published its second snapshot of climate-related and environmental risk disclosure levels among significant institutions under its direct supervision. In line with the results of the first snapshot published in November 2020 -...
As part of the European Green Deal, the European Union intends to encourage green investments and prioritise the revision of the Non-Financial Reporting Directive (NFRD). The European or Green Taxonomy, which sets out a precise classification of sustainable activities with...
The growing importance of sustainability issues and the role of credit institutions in financing transformation places climate and environmental risks at the core of regulatory and supervisory scrutiny today. For some years now, the Network for Greening the Financial System...
The Financial Stability Oversight Council (FSOC) was established under the Dodd-Frank Wall Street Reform and Consumer Protection Act as a result of the 2007-2008 US financial crisis. A first of its kind, the 15-member council is tasked primarily with identifying...
The continued popularity of funds with an environmental, social and governance (ESG) focus has put global ESG assets on track to exceed $53tn by 2025, up from nearly $38tn at the end of 20201. As growth continues, expectations for effective...
A growing interest in environmental, social and governance (ESG) issues is driving record inflows into the ESG-led investment sector. During 2020, sustainable funds available to European investors attracted net inflows of €233bn1, which saw assets under management hit the $1.1tn...
Recently, initiatives to tackle climate-related and environmental risks in the financial services industry have begun across the world. These initiatives followed the adoption of the United Nations Paris Agreement on climate change, the 2030 agenda for Sustainable Development and the...
On 1 March 2021, the European Banking Authority (EBA) launched a public consultation on draft implementing technical standards (ITS) for Pillar 3 disclosures of environmental, social and governance (ESG) risks, under its capital requirements regulation (CRR) mandate. The consultation will...
European sustainable finance regulations evolved considerably in 2020, and the European Banking Authority (EBA) is continuing this trend into 2021. It recently published a discussion paper assessing the potential inclusion of Environmental, Social and Governance (ESG) risks in the supervisory...
This article is part of the series covering the impact of sustainable finance on the insurance sector. Read further:Part 1: Assessing the impact of sustainable finance on insurance entitiesPart 2: How the insurance sector is meeting ESG challenges Clarity of...
This article is part of the series covering the impact of sustainable finance on the insurance sector. Read further:Part 1: Assessing the impact of sustainable finance on insurance entitiesPart 3: Developing a toolkit for responsible investment decisions When taking environmental,...
This article is part of the series covering the impact of sustainable finance on the insurance sector. Read further:Part 2: How the insurance sector is meeting ESG challengesPart 3: Developing a toolkit for responsible investment decisions Amid a global pandemic...
Michael Lennard, Chief of International Tax Cooperation and Trade in the Financing for Sustainable Development Office (FfDO) of the United Nations, examines the role of tax toolkits for developing countries from a personal perspective. The Platform for Collaboration on Tax...
Michael Lennard, Chief of International Tax Cooperation and Trade in the Financing for Sustainable Development Office (FSDO) of the United Nations, discusses, from a personal perspective, a range of key issues on the UN’s approach to transfer pricing. In 2019...
As the world gears up for the transition to net-zero, the European Union is setting ambitious targets with respect to its own environmental footprint. For instance, by 2030 the EU is looking to reduce European greenhouse gas emissions by at...
What is the purpose of a bank? Does it have a responsibility to society at large, over and above its duties to its shareholders, customers and employees? The purpose of banks - to make a profit or be socially useful?...
At first glance, regulatory authorities appear to have deprioritised the issue of climate change. However, a closer look would suggest otherwise and climate change in reality remains a key long-term priority of national and European regulators. In some areas, regulatory...
Persistant negative interest rates, the inherent risk of a trade war between China and the United States, fears of a recession... all worrying signs of an imminent new crisis. However, the real question is not if but when the next...
In 2018, the Bank of England (the “BoE”) set up a project called “Future of Finance” aimed at anticipating the upcoming changes in financial services for the next decade, and the impact of these changes for market participants, customers and...
With rising global temperatures[1] comes an ever-growing pressure on the financial services sector to respond and prepare for the far-reaching effects of climate change. The impacts upon the sector are already being felt – extreme weather events are creating significant...
The Solvency II Directive increases the requirements for transparency vis-à-vis both the regulatory authorities and the stakeholders, including policyholders, financial analysts and investors. In this context, insurance undertakings and groups were, for the first time, required to publish a narrative...
On 6 February 2018, EIOPA published its latest risk-free interest rate curve to be taken into account for the purposes of Solvency II calculations. Based on calculations for January 2018, the curve is slightly different from previously published curves. This...
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