The Sustainable Financial Regulations and Central Bank Activities (SUSREG) Tracker is an interactive online tool developed by WWF as part of its suite of assessment tools, which regularly assesses how financial regulators, supervisors and central banks integrate climate and broader environmental & social considerations in their practices. It evaluates progress on sustainable financial regulations and central bank activities in 44 jurisdictions which together, represent over 88% of the global GDP, 72% of global GHG emissions and 11 of the 17 most biodiversity-rich countries in the world.
The SUSREG Tracker is part of WWF’s Greening Financial Regulation Initiative which advocates and engages with policymakers, central banks and financial supervisors on the urgent need to fully integrate these risks in daily mandates, providing the necessary tools, training, scientific research and assistance where needed.
The tool is also a part of the Asia Sustainable Finance Initiative (ASFI) – a multi-stakeholder alliance, initiated by WWF Singapore that aims to harness the power of the finance sector to create low-carbon, climate resilient and nature-positive economies that deliver on the Sustainable Development Goals (SDGs) and the Paris Agreement.
WWF´s Greening Financial Regulation Initiative (GFRI) directly engages with policy makers, central banks and financial supervisors on the urgent need to fully integrate climate, environmental, and social risks into mandates and operations, mainly through financial regulations and their supervision, as well as monetary policies. We want to show how risks like climate change, water scarcity and biodiversity loss affect investments – and how to respond.
By setting risk management rules and influencing financial markets with monetary policy operations, financial institutions have a unique opportunity to assess and mitigate risks to financial stability, and to redirect financial flows at a global scale. Critically, this cannot be achieved without coordinated and consistent action from financial institutions.
Whilst central banks and financial supervisors have started to collaborate and are engaging in international networks such as the NGFS, BCBS, IOSCO, IAIS, they must fully embrace their critical role in enabling the necessary transition toward a global, nature positive economy.
The Asia Sustainable Finance Initiative (ASFI) is a multi-stakeholder forum, incubated by WWF Singapore that aims to harness and amplify the power of the finance sector to create low carbon, climate resilient economies that deliver on the Sustainable Development Goals(SDGs) and the Paris Agreement. This will ensure that economic and social development is sustainable food, energy, transport, and infrastructure systems.
Based in Singapore, ASFI brings together global industry, academic, and science-based resources to support financial institutions in the region in implementing Environmental, Social, and Governance (ESG) best practices. As Singapore is a conduit for financial flows into Asia, the lending and investment decisions taken by financial institutions based here will have a significant impact on the region’s contribution to a 1.5- degree world and its climate resilience.
These companies are calling for stronger policies to hold global temperature rise to within 1.5°C, in line with reaching net-zero emissions well before 2050. The initial group of 155 signatories represented a US$ 2.4T market capitalisation.
Reported to CDP by the 215 biggest global companies, e.g. through demand for low emissions products and services (such as electric vehicles) and shifting consumer preferences.
The Sustainable Financial Regulations and Central Bank Activities (SUSREG) tool shows central banks’ and financial supervisors’ integration of climate and broader environmental & social considerations in their practices.
Indeed, they are uniquely positioned to influence the lending and investment practices of financial institutions, as well as their disclosure practices. This can be achieved through various means, from setting expectations around governance and risk management processes, mandating scenario analysis that quantify exposure to climate-related risks, to imposing specific disclosure requirements or setting differentiated capital requirements, to name a few. Regulators and central banks also play an advocacy role, and are making it increasingly clear that climate-related and environmental risks are a source of financial risks and, if left unchecked, of increasing financial instability.
While the specific mandates of central banks and financial supervisors may vary across countries, their key responsibilities usually include controlling inflation and money supply, ensuring financial stability and the safety and soundness of financial institutions. To do so, they can leverage on a wide range of tools and measures, from monetary policy to macroprudential and microprudential supervision.
As climate-related and environmental risks are having structural impacts on the economy and the financial system, central banks, financial regulators and supervisors have started to take action.