Featured Pathways

More pathways

Banking Essentials - Part I

This pathway will walk us through the basics of banks, starting with some of the different types and their main functions, then starting to look at the regulation faced by the banks, both before and after the Global Financial Crisis.

Greenwashing

Greenwashing is the act of distributing false information about something being more environmentally friendly than it actually is.

More pathways

Book a demo

Pricing

Ready to get started?

Plans & Membership

Our Platform

Expert led content

+1,000 expert presented, on-demand video modules

Learning analytics

Keep track of learning progress with our comprehensive data

Interactive learning

Engage with our video hotspots and knowledge check-ins

Testing & certification

Gain CPD / CPE credits and professional certification

Managed learning

Build, scale and manage your organisation’s learning

Integrations

Connect Finance Unlocked to your current platform

Featured Content

More featured content

Tackling the Cost of Living Crisis

In this video, Max discusses the cost-of-living crisis currently enveloping the UK. He examines its impact on households as well as the overall economy.

CSR and Sustainability in Financial Services

In the first video of this two-part video series, Elisa introduces us to sustainability. She begins by looking at the difference between sustainability and corporate social responsibility, two terms that can be easily confused.

More featured content

Book a demo

Pricing

Ready to get started?

Featured Pathways

More pathways

Banking Essentials - Part I

This pathway will walk us through the basics of banks, starting with some of the different types and their main functions, then starting to look at the regulation faced by the banks, both before and after the Global Financial Crisis.

Greenwashing

Greenwashing is the act of distributing false information about something being more environmentally friendly than it actually is.

More pathways

Book a demo

Pricing

Ready to get started?

Plans & Membership

Our Platform

Expert led content

+1,000 expert presented, on-demand video modules

Learning analytics

Keep track of learning progress with our comprehensive data

Interactive learning

Engage with our video hotspots and knowledge check-ins

Testing & certification

Gain CPD / CPE credits and professional certification

Managed learning

Build, scale and manage your organisation’s learning

Integrations

Connect Finance Unlocked to your current platform

Featured Content

More featured content

Tackling the Cost of Living Crisis

In this video, Max discusses the cost-of-living crisis currently enveloping the UK. He examines its impact on households as well as the overall economy.

CSR and Sustainability in Financial Services

In the first video of this two-part video series, Elisa introduces us to sustainability. She begins by looking at the difference between sustainability and corporate social responsibility, two terms that can be easily confused.

More featured content

Book a demo

Pricing

Ready to get started?

Book a demo

Pricing

Ready to get started?

Introduction to Global Sustainable Finance Initiatives

Introduction to Global Sustainable Finance Initiatives

Simon Thompson

Chartered Banker Institute CEO & ESG specialist

Regulation, in essence, defines the rules for banks, financial institutions and insurance firms at both the individual firm level - ‘microprudential’ regulation - and at the systemic level - ‘macroprudential’ regulation. In this video, Simon gives us an overview of Financial Regulation and how this is developing to enhance disclosure of climate risks and support the mainstreaming of green and sustainable finance.

Regulation, in essence, defines the rules for banks, financial institutions and insurance firms at both the individual firm level - ‘microprudential’ regulation - and at the systemic level - ‘macroprudential’ regulation. In this video, Simon gives us an overview of Financial Regulation and how this is developing to enhance disclosure of climate risks and support the mainstreaming of green and sustainable finance.

Subscribe to watch

Access this and all of the content on our platform by signing up for a 7-day free trial.

Introduction to Global Sustainable Finance Initiatives

7 mins 38 secs

Overview

Financial regulations have a variety of goals, such as fostering competition and ensuring equal treatment of clients, which may vary across jurisdictions, but one of the most relevant and widely accepted objectives is to safeguard the stability of the financial system. Climate change is going to start affecting the stability of the financial system, so it makes sense that financial regulation needs to develop to enhance the disclosure of climate risks and support the mainstreaming of green and sustainable finance. There are a number of initiatives being developed by central banks, regulators, banks and investors in order to ensure climate risks are identified, quantified and disclosed.

Key learning objectives:

  • Outline how existing regulations are limited in terms of climate disclosure

  • Understand the key climate disclosure initiatives of the banking industry

  • Outline some of the market-led climate disclosure initiatives of the investment industry

  • Understand greenwashing and its types

Subscribe to watch

Access this and all of the content on our platform by signing up for a 7-day free trial.

Summary

Why do we need financial regulation regarding climate risks?

Greenwashing is a real risk to the long-term viability of green and sustainable finance, and to the development of green products and services in finance, and more widely. Financial regulation is required to ensure consistency and transparency in data to allow investors to compare and decide which activities to invest in and ultimately support the mainstreaming of green and sustainable finance. 

How does existing regulation encourage the disclosure of climate risks?

Currently, the existing frameworks are limited when it comes to climate disclosure. 

International banking regulation is overseen by the Basel Committee on Banking Supervision, the committee that sets the framework for calculating the minimum levels of capital that banks must hold. The current Basel III framework requires banks to assess the impact of specific environmental risks on their credit and operational risk exposures. However, there is no requirement under Basel III for banks to identify and disclose the risks of climate change overall, consider portfolio-wide risks, or for supervisory regimes to monitor potential macroprudential risks to financial stability arising from climate change and the transition to a low-carbon world.

On the insurance side, Solvency II sets out a new risk-based and harmonised EU-wide approach to the assessment of capital adequacy, risk management and reporting, however, the regime requires insurers to be sufficiently capitalised to withstand the losses of a 1 in 200-year event, over a one-year time horizon. Given the increasing frequency of extreme weather events, however, this may not be sufficient.

What are the key banking initiatives emerging in terms of climate disclosure?

  1. The Equator Principles - provide a voluntary code of conduct and risk management system for the detection, evaluation, management and monitoring of environmental and social risks in major projects in developing countries, such as energy or infrastructure projects
  2. The Green Bond Principles - provide voluntary guidelines established by the International Capital Markets Association urging transparency and disclosure and encouraging integrity in the Green Bond market
  3. The Green Bond Principles - provide a voluntary structure and standards developed by the Loan Market Association to encourage global continuity in the implementation and reporting of green loans

What are the market-led initiatives of the investment industry?

  1. The Institutional Investors Group on Climate Change - provide a voluntary framework and standards developed by the Loan Market Association to promote global consistency in the application and reporting of green loans
  2. The Portfolio Decarbonisation Coalition - aims in sending strong signals to policymakers and companies about investors’ commitment to the transition to a low-carbon economy
  3. Climate Action 100+ - aims to engage systemically important greenhouse gas emitters and help them improve governance on climate change, curb emissions and strengthen climate-related financial disclosures

What is the market initiative of the insurance sector?

Climate Wise has developed Principles to help members better communicate, disclose and respond to the risks and opportunities of climate change.

What is greenwashing and what are the types?

Greenwashing is making false, misleading or unsubstantiated claims about the positive environmental impact of a product, service or activity. It is a real risk to the long-term viability of green and sustainable finance, and to the development of green products and services in finance, and more widely.

The two general types of greenwashing in the organisational context are:

  1. Firstly - when the efforts of a firm to be ‘green’ make a small, positive difference, but that contribution is insignificant relative to the harm or damage caused by the company’s core activities.
  2. Secondly - when the efforts of a company to be ‘green’ are not green at all and make no difference to the environment.

Subscribe to watch

Access this and all of the content on our platform by signing up for a 7-day free trial.

Simon Thompson

Simon Thompson

Simon is the Chief Executive of the Chartered Banker Institute and co-author of Green Finance: Principles and Practice. He is also a former Vice President of the European Bank Training Network, and is currently Chair of the Global Banking Education Standards Committee. He specialises in professional ethics, and green and sustainable finance.

There are no available videos from "Simon Thompson"