Consultation response – A precautionary approach is crucial for finance ministers to drive climate action

15 February 2023

Consultation response

In its response to the consultation by the CFMCA, Finance Watch calls on ministries of finance to integrate a precautionary approach to climate risk into their mandates and roles

Finance Watch has responded to a global consultation on ‘Strengthening the Role of Finance Ministers in Driving Climate Action’, being run by The Coalition of Finance Ministers for Climate Action.

The consultation is part of the process for the Coalition to publish a report on the role of ministries of finance in driving climate action.

Finance Watch welcomes the report and the focus that the Coalition is putting on the essential issue of climate change and the actions that ministries of finance need to take. In the consultation response Finance Watch highlights two key areas that need more attention:

  • The first is to ensure that ministries of finance have an explicit mandate and role to tackle climate-related financial risks, looking to new approaches to achieve this in prudential regulation.
  • The second is to make sure that ministries of finance take climate-related fiscal risks into account, to allow the investments and reforms needed to mitigate and adapt to climate change to take place.

In both cases Finance Watch points to the need to integrate a precautionary perspective into the mandate and role of ministries of finance.”