Regulators Failing on Social and Nature – WWF  

Central banks and financial supervisors are making notable progress to “green” financial regulation and supervision, according to the WWF Sustainable Financial Regulations and Central Bank Activities (SUSREG) Tracker 2023. However, significant gaps remain, in particular in high-income countries, countries with the largest greenhouse gas (GHG) emissions and those that are the richest in biodiversity.  The tracker found that current financial regulations and central banking activities focus on climate and do not fully account for broader environmental and social risks and impacts, like biodiversity loss and its effects on communities who heavily depend on fragile natural resources. Only 18% of central banks show exemplary progress in integrating climate-related risks into their monetary policy and central banking activities, whilst 68% of high-income countries have not yet adopted adequate climate and environmental banking supervision policies. Moreover, ambition and implementation of sustainable financial measures is unequal across countries. Maud Abdelli, WWF’s Greening Financial Regulation Initiative lead, said: “Inaction or little action is fueling the dual climate-nature crisis. At the COP28 UN climate summit last week, countries agreed to transition away from fossil fuels, but they failed to commit to a full phase-out and to prioritise protecting nature. Central banks and supervisors need to take up a prominent role in directing finance away from the most environmentally harmful sectors like coal, gas and oil, and set minimum ESG expectations in financial regulation and supervision.” 

 

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