Climate change is a global problem and international cooperation is needed to combat it as effectively as possible and manage the risks it poses. For this reason, the Riksbank participates in several international working groups that are working to address climate-related problems in the financial system.
Since 2018, the Riksbank has participated in the Network for Greening the Financial System (NGFS), a global network of central banks and supervisory authorities focusing on climate aspects in the work of the authorities. The Riksbank participates in three NGFS working groups and one expert network for legal issues. Among other things, these three working groups look at issues surrounding the design and analysis of climate scenarios, monetary policy and the impact of climate change, and approaches for central banks to work on sustainable investment, climate-related reporting and sustainable central banking.
In the work of the Basel Committee The Basel Committee on Banking Supervision develops global standards, guidelines and recommendations for the supervision and regulation of banks. The Basel Committee’s standards are introduced by the national legislative systems of the members. For Sweden, this takes place under the framework of the EU. , the Riksbank participates in the Task Force on Climate-related Financial Risks (TFCR). The TFCR works with a broad assessment of potential measures – spanning the three pillars of the Basel framework: disclosure, supervision and regulatory measures – to address climate-related financial risks that can threaten the global banking system. One step on that path was taken in 2022 with the Basel Committee’s publication of Principles for the Effective Management and Supervision of Climate-Related Financial Risks BIS (2022) Principles for the effective management and supervision of climate-related financial risks Basel Committee on Banking Supervision. and clarifications of how the existing Basel Framework can capture climate-related financial risks. BIS (2022) Frequently asked questions on climate-related financial risks Basel Committee on Banking Supervision.
At a European level, the Riksbank also participates in the Project team on climate risk monitoring of the ECB and European Systemic Risk Board (ESRB). The working group surveys the extent to which macroprudential policy instruments can be used to manage climate-related risks in the financial system. By the end of 2023, the working group plans to be able to present recommendations on how the banks’ capital requirements could be adapted to include climate-related systemic risks or on what additional risk measures could be used in the regulation of the banks’ climate risk management.