As the prominence of the social dimension of ESG surges, regulators feel the necessity to intervene more forcefully to replace voluntary reporting with tougher standards. 

In an interview with Global Risk Regulator ahead of the United Nations Climate Change Conference COP26, Mark Carney, former central banker and UN special envoy on climate change and finance, discusses the urgent regulatory steps needed.

Buoyed by their apparent progress on framing financial disclosure measures to combat climate change, the world’s central banks and financial regulators have embarked on an equally ambitious initiative to stem biodiversity loss. This marks a profound shift for central banks, placing protection of ‘natural capital’ squarely within their once tightly drawn financial stability mandates. By Victor Smart

Impressive momentum has built up behind the effort by the world’s financial regulators to create coherent classifications to define what economic activities should truly count as sustainable, but this could also be setting the scene for fragmentation. 

The sprawling EU sustainability taxonomy is fiendishly complex, politically contentious and monumental in its practical scope. It suffers from yawning data gaps, and some feel its credibility is being sabotaged by the very states that backed it at the outset. 

Central banks have signalled a new phase in tackling climate change by placing a net-zero carbon strategy at the core of their monetary policy and oversight of financial institutions. 

The Federal Reserve and other US financial regulators are framing a slew of regulations on climate change as they hurry to deliver on ambitious policies to combat global warming set out by the Biden administration. 

The overwhelming focus on transitioning the world economy to green technologies such as solar energy has a simple drawback: it fails to place value on minimising emissions over the coming decades of existing brown industries like generating electricity from fossil fuels. 

Hong Kong, encouraged by mainland China, has ambitions to become Asia’s green financial hub, though the territory still has a way to go to establish its sustainable credentials. By Victor Smart

Policy-makers and their advisers have at last recognised the implications of climate change on financial stability, marking a sea change in political sentiment on this issue. By Victor Smart