In response to the Paris Agreement, governments and intra-governmental organizations launched a number of measures to promote sustainable finance. To date, these have focused on voluntary measures, relying on businesses and investors to self-monitor in this area. As the global move towards a more sustainable economy gathers pace, and the need to respond to the risks presented by climate change becomes more urgent, these measures are beginning to be transposed into legislation and regulation. While many financial institutions have already implemented internal systems for assessing and monitoring the sustainability of their businesses, the introduction of regulatory frameworks focused on sustainable finance should lead to standardization in this diverse area, requiring financial institutions to assess and report on sustainability issues within their existing governance and risk management structures.
Read more: https://www.bis.org/bcbs/publ/d502.pdf