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Transition plans for banks: why an obligation?
#Foreword
 
In order to implement its Green Deal, the European Union will have to ensure that its financial regulations are consistent with its climate ambitions. And this is happening now: the European negotiations on the banking package will end in the summer and will not be reopened for several years.
The context has changed rapidly in recent years, and the EU must adapt. International competition to set the new 'standard' in financial regulation for climate has increased, and it is now clear that climate disclosure required of financial actors is not a sufficient lever for action. It is equally clear that the best way to protect financial stability and finance from climate risks is to ensure that it actively contributes to an orderly transition.
For I4CE, the banking package should be an opportunity to require banks to publish transition plans and integrate them into prudential regulation. I4CE has been working with a number of financial experts and supervisors to refine this proposal, which is already supported by many stakeholders. In this week's I4CE newsletter, you will discover the result of our analysis: why these plans should be made mandatory, what their content should be, what this implies for banking supervisors and what legislative changes are needed to strengthen and clarify the current texts.

#I4CE_Report
Include mandatory banking transition plans within Pillar 2
In this study, carried out through numerous interviews with banking institutions and field experts, I4CE analyses the relevance of an obligation for banks to adopt a transition plan, and goes into the details of its implementation: the content of these plans, the levers of action of financial supervisors to make such an obligation operational, and the legislative changes that this implies.

Video 2minOn #TransitionPlan for banks

In 2 minutes, Julie Evain from I4CE explains why it is necessary to introduce a mandatory transition plan for banks and the implications for banks and banking supervisors.

#FlashFromThePast

It is essential for France and the EU to make its voice heard in international debates on financial regulation for the climate. Although European regulators and supervisors have not waited for the endorsement of international bodies such as the Basel Committee to change their practices, their agenda could nevertheless be disrupted by diverging views on climate issues. In this post, you will find the recommendations addressed by I4CE to the Basel Committee, which brings together the financial supervisors of the G20 countries.
Report: Indexing capital requirements on climate : What impacts can be expected ?
In order to accelerate the transformation of the banking sector, the debate has tended to focus in recently on the reform of prudential requirements, which oblige banks to set aside reserves to protect them in the event of a crisis. For some, prudential requirements should be increased when banks finance activities that are harmful to the climate. For others, they should be reduced for so-called "green" activities. I4CE conducted the first quantitative study on these proposals: read our results.
Project: Finance ClimAct
I4CE is participating, with many partners, in the "Finance ClimAct" project. Financed by the European Commission, its objective is to help the Commission to implement its sustainable finance action plan. It aims to provide to savers, financial institutions and companies with concrete tools to integrate climate issues into their investment decisions, thus aligning financial flows with zero-carbon objectives and strengthening the resilience of the financial system to climate risks.

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