FINMA publishes new “Nature-related financial risks” circular
The Swiss Financial Market Supervisory Authority FINMA is today
publishing its new “Nature-related financial risks” circular. It is
thus clarifying its supervisory practice on the management of climate-
and other nature-related financial risks. The circular applies to
banks and insurers and will enter into force in stages from 1 January
2026.
In the new circular, FINMA communicates its expectations
of banks and insurers with regard to the management of climate- and
other nature-related financial risks. The aim of the circular is to
strengthen the resilience of supervised institutions to these risks
and thus also protect their clients and the Swiss financial centre.
FINMA adopts a broad approach to the risks covered, which also
encompasses other potentially relevant nature risks in addition to
climate change. FINMA is guided by international frameworks and
standards and, applying the principle of proportionality, sets higher
expectations for larger and complex institutions.
The circular
was discussed comprehensively and intensively during the consultation.
In principle, a majority of those involved in the consultation process
welcomed the clarification of supervisory expectations in this area.
Opinions differed widely, however, as to the details. Industry
associations were mainly critical, while representatives of
environmental protection, civil society and academia were positive and
suggested even more far-reaching provisions. FINMA has responded to
various points from the consultation and implemented them in the
circular.
The circular will enter into force on 1 January 2026
and will initially apply exclusively to climate-related financial
risks. This takes into account the differing degrees of maturity of
the topics of “climate risks” and “other nature risks” as well as the
state of preparation by the institutions. Banks and insurers in
supervisory categories 3 to 5 have one year longer to comply with the
provisions relating to climate-related financial risks (until 1
January 2027). The circular will apply to all nature-related financial
risks from 1 January 2028.
In line with its strategic goals
for 2025 to 2028, FINMA will work to ensure that institutions take
climate- and other nature-related financial risks into account and
remain resilient to these risks. Implementation of the circular is an
important basis for this and will be proactively monitored by FINMA.