5.4 Climate-related financial supervision

As described in paragraph 5.3, Dutch financial supervisors are examining how to better integrate climate-related risks in their supervision practices. This paragraph presents a first and non-exhaustive overview of current regulatory requirements, supervision on climate-related risks could (and perhaps: should) be based upon.

These “legal hooks” may be found in the requirements to ensure controlled and ethical business operations (paragraph 5.4.1 and 5.4.2) and in several transparency and disclosure obligations (paragraph 5.4.3). Fit and proper testing as a supervisory tool will be discussed in paragraph 5.5.

It can be expected that, in addition to these provisions, upcoming EU-regulation will provide financial supervisors with more and more specific tools to address climate-related risks in their supervisory practices. For example, new regulation may require financial advisors to assess sustainability preferences when offering financial advice (see paragraph 5.2.2). Such requirements will be primarily supervised by the AFM.