It has always been clear that those who regulate the financial system have a role to play in identifying and mitigating the potentially destabilising effects of environmental risks across the banking system as a whole.
Since the financial crisis of 2008, banking regulators have increasingly been enacting policies and regulations to target environmental risks, especially in some of the major fast-growth economies. Recognising the growing momentum behind this trend, the Banking Environment Initiative (BEI), in partnership with UNEP FI and with support from Bloomberg, decided to initiate an independent process to look at these issues and the ways in which regulators worldwide might respond to them.
The resulting study, Stability and Sustainability in Banking Reform: Are Environmental Risks Missing in Basel III? authored by Professor Kern Alexander, Cambridge Institute for Sustainability Leadership (CISL) Fellow and Chair in Law and Finance at the University of Zurich, assesses the links between systemic environmental risks and financial stability. It offers insights into how some members of the Basel Committee are already acting on these links. Opportunities for international coordination and collaboration on these approaches are suggested.
This study has profound implications. CISL and the BEI, together with their partners, look forward to playing an active role in further analysis and discussion to determine the feasibility of implementing its recommendations.
Related links
Banking Environment Initiative
