SUSREG TRACKER
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SUSTAINABLE FINANCIAL REGULATIONS AND CENTRAL BANK ACTIVITIES
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, broader environmental, and social considerations in their practices.
The SUSREG Tracker is part of WWF’s Greening Financial Regulation Initiative and the Asia Sustainable Finance Initiative (ASFI).
WWF
Greening Financial Regulation Initiative (GFRI)
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.
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.
WWF
Asia Sustainable finance initiative (ASFI)
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.
WHY SUSREG
Average 68% decrease in population of...
..mammals, birds, amphibians, reptiles and fish monitored between 1970 and 2016, according to WWF’s 2020 Living Planet Report
US$ 10-31T/y in ecosystem services lost
Between 1997 and 2011, due to land-cover change and land degradation worldwide, according to a 2019 OECD study.
1.2 billion people displaced by 2050
1.2 billion people face the risk of being displaced by 2050 due to the consequences of climate change and other environmental threats.
US$ 1T at risk from climate change
Reported to CDP by the 215 biggest global companies, with climate impacts likely to hit within the next 5 years.
US$ 320B total costs of global weather disasters in 2017
According to Munich Re, 2017 was the costliest year ever in terms of global weather disasters. Only US$130 billion of these costs were insured.
177 Leading Companies for a Net-Zero Recovery
These companies are calling for stronger policies to hold global temperature rise to within 1.5°C, in line with reaching net-zero emissions well before 2050. The initial group of 155 signatories represented a US$ 2.4T market capitalisation.
US$ 2.1T in sustainable business opportunities
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.
84 countries committed to reversing biodiversity loss by 2030
The Leaders’ Pledge for Nature was signed at the UN Summit on Biodiversity in September 2020, and includes the European Union.
SUSREG AT A GLANCE
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.
SUSREG covers
47
jurisdictions
Representing
88%
of global GDP
And
72%
of global GHG emissions
Including
11 of 17
most biodiversity-rich countries in the world
The crucial role of central banks and supervisors
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.
TAKE ACTION
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WHO SHOULD USE SUSREG TRACKER
Central banks, financial regulators and supervisors
- To strengthen regulatory and supervisory practices by integrating E&S considerations into financial regulations (for banking and insurance), guidelines, and monetary policy operations.
- To benchmark themselves against peers in key markets worldwide and align with best practices.
International financial standard-setters and initiatives
- To understand and improve their level of ESG integration and disclosure against objectively defined indicators.
- To identify and learn from more progressive peers.
- To engage with regulators and NGOs on sustainable banking aspects.
Commercial banks and insurance companies
- To understand the differences in the regulatory and monetary policy frameworks between the countries in which they operate (and those affecting the financial institutions in their portfolios).
- To formulate their ESG strategy by taking into consideration other countries’ best practices in banking and insurance regulations.
- To support and inform their engagement with government entities and policymakers.
Academics, think-tanks, and other non-governmental organisations
- To better understand the differences in the financial regulations in key countries worldwide.
- To assess the degree of integration of various E&S issues in financial regulation and central bank activities, and track progress.
