The Financial Market Authority (FMA) invites the financial sector and other stakeholders to comments on the updated Guide regarding the consideration of sustainability and climate risks. The consultation is open until 15 January 2025.
The FMA today, on Friday, 22 November 2024, started the public consultation regarding its general revised cross-sector Guide for Managing Sustainability Risks. The Guide, which was initially published in 2020 is intended to serve as guidance for the supervised entities in the Austrian financial market in the consideration of sustainability risks within the scope of their business activities and should prepare them in terms of regulatory developments and supervisory expectations. The Guide has been comprehensively revised, taking into account the regulatory and methodological developments in recent years, thereby also considering the dynamic in environment that exists with regard to Sustainable Finance. Sustainability risks address risks in relation to Environment, Social, Governance, frequently abbreviated to ESG.
“The extreme weather events in Austria and its neighbouring countries – due to heat, torrential rain and flooding, have once again dramatically shown that sustainability and climate risks are not phenomena that are consigned to distant lands, but are increasingly manifesting themselves to a massive extent here in Austria,” remarked the FMA’s Executive Directors Helmut Ettl and Eduard Müller. “Financial market participants must consider them in their daily activities in relation to credit, market and operation risks.”
Illustrating the latest policy developments and considering new aspects
“Regulatory developments in the area of Sustainable Finance have been particularly dynamic in their nature,” remarked Messrs. Ettl and Müller. “This was the impetus behind the decision to comprehensively revise the Guide.” The revised Guide introduces two new topics: there is a separate chapter dedicated specifically to natural-related risks and biodiversity risks. Furthermore, a new section of the Guide handles the topics of transition planning and transition plans as well as their significance for risk management. Other issues include the consideration of litigation risk in the chapter of the Guide about Legal and Reputational Risks as well as a separate section about the risks in relation to the issue of Greenwashing, i.e. regarding allegations that ESG features are presented in a misleading manner.
As one aspect of a particular practical relevance, the Annex has also been updated and extended, which provides an overview about the tools and methodologies used for handling sustainability risks. The Environment Agency Austria (Umweltbundesamt) was also involved in this part of the Guide.
Input from the interested public is a key element of the Guide.
At the outset of the process of revising the Guide, the FMA placed particular importance on involving various stakeholders in this process. Representatives from ministries, authorities, industry, academia, research and civil society were invited to provide their inputs for revising the Guide at a workshop held in April 2024. Following on from this open exchange, this consultation process is the next step.
The FMA therefore invites interested parties to get involved in the public consultation of the Revised Guide for Managing Sustainability Risks (consultation draft only available in German), which runs until 15 January 2025 via the FMA website at: https://www.fma.gv.at/fma/fma-konsultationen/
Journalists may address further enquiries to:
Boris Gröndahl (FMA Media Spokesperson)
Telephone: +43 (1) 249 59-6010
Mobile: +43 676 8824 9995
E-Mail: [email protected]