The European Commission is contemplating stress tests and steps to induce financial companies to boost their buffers from climate-change dangers, ” the EU financial services leader said on Wednesday.
The move could represent a significant shift in the bloc’s climate policy that has up to now focused on encouraging companies to adopt greener policies voluntarily.
Valdis Dombrovskis explained the European Union executive order will research methods to enhance financial companies’ management of environmental and climate dangers and boost their defenses against natural disasters and other potential financial losses brought on by climate change.
“That’ll indicate analyzing whether we will need to generate any regulatory changes to ensure better monitoring and reporting of climate-related risks,” Dombrovskis explained.
This greater examination could induce insurers and other financial companies to boost their buffers against climate dangers.
The transfer would be a part of a broader approach to assist the transition to a greener economy.
New EU rules on revealing the climate change of asset managers’ investment plans have been lately consented and will kick from 2021.
Dombrovskis, that has been that the EU finance leader for the previous five decades and has had his mandate renewed, ” said the commission would also research labels and standards for green loans and mortgages to assist owners to update their homes.
Buildings are responsible for a major chunk of carbon emissions, and together with three-quarters of these at the 28-country European Union being energy wasteful, according to EU data.