The EU is reportedly looking to introduce climate risk stress tests to force financial firms to raise their protection against global warming.
Valdis Dombrovskis, the European finance commissioner, said on Wednesday that the commission would look into ways to encourage the industry to do more to protect themselves against natural disasters and other possible risks caused by climate change, Reuters reported.
He added that this might require the EU to introduce new rules and regulations to ensure the industry’s reporting is up to snuff.
Reuters reported that introducing stress tests would be a major change in how the EU is regulating financial services firms’ impact on the environment, having previously being satisfied with encouraging the industry to adopt greener policies.
Similarly, the UK’s Financial Conduct Authority (FCA) issued a feedback statement last month that outlined the regulator’s proposals to improve climate change and green financial products. The FCA’s document outlined how the regulator will tackle the question of green finance and climate change in the future.
In other news, Dombrovskis stated in October that the EU may introduce new laws to regulate cryptocurrencies like the Facebook-led Libra project.
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