Improved transparency contributes to economic development and reduces the risks of financial crises. Work to develop better transparency requirements has been ongoing for a long time. For example, the Riksbank has long advocated higher transparency requirements for the major Swedish banks with regard to various financial risks. The Riksbank has had a driving role in this development towards greater transparency and harmonisation of financial information. One of the Riksbank's tools has been recommendations directed at the banks in the Swedish financial system through the Financial Stability Report.^[18] See Financial Stability Report 2012:1. One risk area where the Riksbank made recommendations early on was liquidity risk, where the Riksbank described how well the major Swedish banks were meeting liquidity measures. Another area is doubtful loans, where the Riksbank has emphasised that transparency should be increased so that investors can better understand the risks and quality of the banks' loan portfolios. ^[19] See O. See O. Fredriksson and N. Frykström (2019), "Bad loans and their effects on banks and financial stability", Economic Commentary, March, Sveriges Riksbank.

One current area where the Riksbank would like to see improved transparency is in climate-related risks. It is important that banks disclose their exposures to climate risks.^[20] See Financial Stability Report 2022:1. Until a new regulation is in place for climate-related risks, voluntary transparency is therefore a first step. In order to manage climate-related risks effectively, authorities and international organisations need to work together to develop consistent standardised frameworks and increase transparency.

Banks also have an important role to play in this work. They should be proactive and already be as transparent as possible. An effective transparency framework supports the climate transition and can eventually enable better and greener investments. The major Swedish banks are producing sustainability reports and are moving in the right direction, but more can be done. For example, information on climate footprint and so-called scope 3 emissions^[21] Greenhouse gas emissions are measured in different ways. Scope 1 includes direct emissions, scope 2 indirect emissions and scope 3 is indirect emissions not included in scope 2. For a fund management company, for example, scope 3 means emissions related to the companies in which the fund invests. as well as related key figures that can be used to assess progress towards set targets. Although the new sustainability standards are not yet fully developed, banks should strive to provide as much information as possible. Once frameworks are in place and more data is available, transparency can then continue to improve. At this stage, improved climate transparency should be seen as complementary to regulation and specific requirements. Improved transparency also provides incentives for banks not to take too much risk and reduces the likelihood of stress in one part of the banking system spreading to other parts.