04/15/2021 | Press release | Distributed by Public on 04/15/2021 03:09
Banco de Portugal today published Carta Circular n.º 10 of 2021 in its Boletim Oficial, which establishes supervisory expectations on the management of climate and environmental-related risks for the less significant institutions under its direct supervision.
The identification and assessment of climate and environmental-related risks is one of the priorities set out in Banco de Portugal´s Commitment to Sustainability and Sustainable Finance. Climate and environmental related-risks assume a growing importance for the banking system, given its distinctive features compared to traditional sources of financial risk. Considering the uncertainty and the time horizon in which they may materialize, climate and environmental-related risks require due special attention.
Banco de Portugal deems it essential that less significant institutions under its direct supervision progress towards the identification, measurement, and mitigation of climate and environmental related-risks, in a manner which is proportional to the nature, scale, and complexity of the activities and risks to which they are exposed. To this effect, and to ensure that there is a consistent and balanced application of high supervisory standards across all supervised institutions, Banco de Portugal extends to less significant institutions the supervisory expectations on the management of climate and environmental-related risks defined by the European Central Bank for significant institutions under the framework of the Single Supervisory Mechanism.
A transition period for the application of these expectations is envisaged.
For additional information, in Portuguese, about the supervisory expectations on the management of climate and environmental-related risks for less significant institutions please consult Carta Circular n.º 10 of 2021.