FSB: Next steps for climate data and disclosure alignment

Forward-looking data and continued international cooperation are two of the key areas for focus in the coming months, according to the Financial Stability Board’s (FSB) latest roadmap.

The annual FSB Roadmap for Addressing Climate-Related Financial Risks provides progress updates and areas for focus. It will be delivered to G20 finance ministers and central bank governors in Gandhinagar, India, next week.

Notable progress this year is the recent announcements by the International Sustainability Standards Board (ISSB) of its final standards, IFRS S1 on general sustainability-related disclosures and IFRS S2 on climate-related disclosures, and that the ISSB will be taking over the monitoring of TCFD.

But the report also highlights progress on improving the comparability of data, the development of frameworks and metrics for monitoring climate-related vulnerabilities, and the work on embedding climate-related risk into risk management.

“Across all blocks of the Roadmap, financial institutions’ progress in addressing climate-related financial risks relies on the non-financial corporate sector making similar progress, including in the areas of firm-level disclosures, addressing data gaps and transition plans,” the report said.

Looking ahead, the FSB would like to see further alignment in order to prevent firms having to double up on disclosures, and the development of metrics that measure climate-related risks in a forward-looking manner.

It is setting up a working group that will, as an initial task, develop a “conceptual understanding on the relevance of transition plans and planning by financial and non-financial firms for financial stability”. It stressed again that with many initiatives having started or being considered, “it will be important to ensure close coordination among the FSB, SSBs and other relevant bodies”.

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