Supervision

Overview

Climate-related risks are a source of financial risk and therefore, the NGFS called very early on central banks and supervisors to start integrating climate-related risks into micro-prudential and financial stability monitoring. 

The NGFS has created the Workstream on Supervision to help NGFS members incorporate climate-related and environmental risks within their supervisory frameworks and practices. The Workstream identifies and shares good practices in supervision and prudential regulation, thus contributing to the uptake of consistent practices across jurisdictions and within the financial sector.

From 2024 to 2026, it is aiming at exploring the following topics:

• Transition Planning/Plans: the Workstream is seeking to develop a better understanding of:
  • the possible interactions between transition plans and scenario analysis,
  • the implications of financial institutions’ target setting in transition plans from the micro-prudential perspective;
• Nature-related financial risk: the aim of the Workstream is to consolidate and exchange supervisory practices on the integration of nature related risks within supervisory frameworks;
• Integration of climate and environmental risk into financial institutions’ governance: the Workstream works on consolidating and exchanging supervisory practices on the integration of climate and environmental risk into financial institutions’ corporate governance and risk management practices, with a focus on proportionality and operationalization status;
• Update of the Guide for Supervisors: following the foundational publication of the Guide for Supervisors in May 2020, the Workstream has to objective to publish an updated version this Guide, incorporating the latest NGFS findings since this initial publication. 

Chairs’ institutions

The workstream is co-chaired by Mr Alberto Casillas (Banco de España) and Mr Donald Chen (Hong Kong Monetary Authority).

Recent publication

Refer to the latest publications of the Workstream on Supervision.