On June 30, ISDA, the Institute of International Finance (IIF) and the Global Financial Markets Association (GFMA) submitted a joint response to the Financial Stability Board (FSB) on its interim report on supervisory and regulatory approaches to climate-related risks.

The associations support and welcome the FSB’s initiative in developing the report to assist supervisory and regulatory authorities in developing their approaches to climate change, focusing on cross-sectoral and system-wide aspects of climate-related financial risks.

The associations consider climate change to be a critically urgent global issue, which warrants a globally coordinated and harmonized approach across jurisdictions, including in supervisory principles and standards with respect to climate risk management. As outlined in the response, the associations and their members consider that supervisory engagement, risk management, disclosure, and scenario analysis exercises are likely to be an effective toolkit for financial institutions to measure, manage, and take steps to mitigate climate-related risks.

ISDA’s members are committed to maintaining the safety and efficiency of the global financial markets and recognize that banks have a big role to play in the management of climate-related financial risks.