The SUSREG interactive Tracker assesses how financial regulators, supervisors and central banks integrate climate and broader environmental & social considerations in their practices.
The climate and environmental crises we are facing are accelerating, and the financial sector must fully play the critical role it has in enabling the transition to a low-carbon, resilient and sustainable economy. For this to happen rapidly, at scale and in an orderly fashion, the mobilisation of central banks, financial regulators and supervisors is crucial.
Building on its experience of working with a wide range of financial sector stakeholders, WWF has developed a framework to assess the integration of environmental & social considerations in regulatory and supervisory practices, as well as in central banking activities and other measures that support the redirection of financial flows towards more sustainable practices.
The main objectives of the SUSREG Tracker and underlying framework are to:
With this tool, WWF aims to facilitate knowledge sharing between institutions, offering a simple way to build on existing good practices and improve understanding of how climate-related and environmental risks can be integrated in central banks’ and financial supervisors’ activities.
The SUSREG framework is intended to provide practical guidance on the integration of environmental & social considerations in financial regulations, supervisory expectations and monetary policy.
More specifically, the SUSREG framework:
The development of the SUSREG framework has been led by WWF-Singapore, in collaboration with and with support from numerous sustainable finance experts in key WWF national offices globally.
At various points in the development of this framework, WWF sought feedback from a broad range of external stakeholders, from academia and think-tanks to financial supervisors and central banks, whom we would like to thank for their valuable contributions.
The SUSREG framework currently focuses on banking and insurance supervision. In the future, it will be expanded to cover other key parts of the financial system, such as capital markets and asset management.
The assessment framework is structured around three key pillars, covering the various aspects of banking supervision and central banks’ activities, as well as the creation of an enabling environment for sustainable finance.
Banking & insurance supervision
This section assesses the maturity of supervisory expectation in using various tools and measures to ensure both the safety and soundness of individual banks, (re)insurance companies and the financial system stability, with regards to climate, environmental, and social risks. It also includes measures that regulators and supervisors themselves can take to show leadership and better understand these risks and their implications for the financial sector.
This section assesses various measures that central banks can take to address climate, environmental, and social risks, in keeping with their key mandates of ensuring money supply and price stability. It also includes measures that central banks can take to show leadership and better understand these risks and their implications.
This section assesses the maturity of the environment required that would be key for the financial sector to fully support the transition to a low-carbon, resilient and sustainable economy. Some of these measures may be outside the remit of central banks or financial supervisors.
The assessment against SUSREG indicator(s) leads to either a positive, partial or negative result. In addition, the results clearly display the scope of the underlying measure(s) assessed: either only applicable to climate-related risks, to climate-related and broader environmental risks, or to the entire range of environmental & social risks.
The assessment has expanded from 38 jurisdictions in 2021 to 44 jurisdictions in 2022 across the Americas, EMEA (Europe, Middle East, and Africa), and APAC (Asia Pacific). These jurisdictions cover more than 88% of the global GDP and 72% of global GHG emissions, and 11 of the 17 most biodiversity rich jurisdictions in the world.
Most of the jurisdictions are members and observers of the Basel Committee on Banking Supervision (BCBS), the International Association of Insurance Supervisors (IAIS), and the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). Forty-two jurisdictions have been assessed for both banking and insurance, and out of the jurisdictions, two (Saudi Arabia and Zambia) have been assessed only for banking and another two (Bermuda and Taiwan) only for insurance.