Consultation response
In an open-letter signed by 30+ experts, practitioners and global stakeholders, Finance Watch called on the Basel Committee to enshrine the principle of “full transparency” in disclosures of climate-related financial risk in order to close the loopholes for concealment of emissions. This principle means looking through the layers of financial intermediation to the underlying activities and their associated emissions.
As climate change continues to pose unprecedented risks to our planet, our economics and our financial systems, we must ensure that financial institutions disclose their true exposure to climate-related risk, leaving no room for ’emissions laundering’ through complex financial intermediation.
In this letter coordinated by the Climate Safe Lending Network, Finance Watch and co-signatories urge the Basel Committee on Banking Supervision (BCBS) to take decisive action for greater transparency in climate-related financial disclosures. The letter, signed by more than 30 experts, practitioners, and global stakeholders, emphasises the critical importance of closing existing loopholes and preventing ’emissions laundering’ through complex financial intermediation.
At the heart of this call is the principle of “full transparency.” The letter highlights the necessity of holding financial institutions accountable for disclosing the true extent of their climate-related risk exposures. By prioritising transparency over formalities, the BCBS can play a pivotal role in fostering a culture of accountability within the financial sector. Simpler transaction structures and more stringent disclosure requirements are essential steps towards mitigating systemic climate risks and building a more resilient financial system.
For more on this topic, read the excellent explainer written by James Vaccaro and published in the media “Green Central Banking“.
