Climate change and sustainability issues for the financial sector
Produced in partnership with Grania Baird of Farrer & Co and Kya Fear of Farrer & Co

The following Environment practice note produced in partnership with Grania Baird of Farrer & Co and Kya Fear of Farrer & Co provides comprehensive and up to date legal information covering:

  • Climate change and sustainability issues for the financial sector
  • Climate change and risks to financial institutions/financial stability
  • Physical risks
  • Transition risks
  • Liability risks
  • Biodiversity and nature and risks to financial institutions/financial stability
  • Global initiatives
  • The Paris Climate Agreement
  • United Nations: Principles for Responsible Investment, Principles for Responsible Banking and the 2030 Agenda for Sustainable Development including the Sustainable Development Goals
  • The G20: Task Force on Climate-related Financial Disclosures
  • More...

Climate change and sustainability issues for the financial sector

Climate change and sustainability issues have become hot topics in recent years.

Landmark international commitments were concluded in 2015 with the adoption of the United Nations (UN) 2030 Agenda for Sustainable Development including the UNs’ global Sustainable Development Goals and the Paris Climate Agreement (each described below). The Paris Climate Agreement, in particular, includes the commitment to align financial flows with a pathway towards low-carbon and climate-resilient development. These commitments significantly raised international awareness of the financial impacts of climate change. They have also increased collaboration on the work needed to transition to a low carbon economy.

Following these international commitments governments, regulators as well as industry participants have launched a plethora of new initiatives and policies designed to help meet the goals set out in the international commitments as well as responding to society and consumer demand. The pace of these new proposals has accelerated in recent years. A number of the initiatives were voluntary with recommendations for the disclosure of climate related financial information but there is a growing trend towards mandatory disclosures. Some of the initiatives are more practical being tools, guidance and recommendations for firms to use in responding to climate-related risks. With a view to addressing concerns about potential 'green washing' there are specific rules and guidance proposed for firms promoting investment products

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