2021
As part of the thought leadership series produced by EIT Climate-KIC and UNEP FI, this report puts forward policy proposals to support the regulation of a financial system which addresses the needs of society and the planet.
The report presents ten proposals across five areas. First, managing systemic risk through expanded climate stress testing and capital buffers that reflect climate-related financial risks. Second, regulating impact by defining what Paris and net-zero alignment mean in practice, and introducing KYCO₂ processes to collect climate data from clients. Third, managing credit out of fossil fuels and deforestation using tools like a financial non-proliferation treaty and ‘bad banks’ for high-risk assets. Fourth, greening portfolios through incentivized green lending facilities. Fifth, regulating the just transition by introducing a Climate and Communities Reinvestment Act and resetting the definition of fiduciary responsibility.
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