FI will include a sustainability perspective when reviewing business models and credit risks of banks, according to a report published by FI today.
FI will review this year the extent to which banks consider sustainability risks when assessing the profitability of their business plans and in their risk management. FI will also analyse climate-related cedit risks in the banks' credit portfolios.
"Financial firms cannot solve the climate problem on their own, but they can definitely contribute to the resolution by working in the right way. A lot is happening, but FI sees a need for financial firms to be more transparent about climate risks and their financing of firms in sectors that have an impact on the climate," says Director General Erik Thedéen.
The new EU regulation introduces requirements on enhanced transparency for financial firms' investment activities. Similar requirements are expected for banks' lending activities, and FI is encouraging banks to pre-empt the coming regulations. It is important that banks already now start to report more on their exposure to climate risks. This requires that banks use analysis tools, for example PACTA, to gain a better overview of climate risks and how well their credit portfolios align with climate goals.