5.6 Final remarks

It can be concluded from the above that Dutch financial regulations do, indeed, provide financial supervisors with the tools necessary to address climate-related risks in their fit and proper assessments. So, financial supervisors may use initial fit and proper assessment to put the climate-issue on the agenda. The issue can be well discussed during the assessment interview, when assessing the required knowledge, skills and awareness relating climate-related risks and the impact of these risks on the financial institution. Also, the supervisor may enter into a dialogue with already appointed members of the management body, creating further awareness of climate-related risks and, if necessary, stimulate additional training to acquire the necessary level of expertise. Should there be cause for concern, supervisors may closely monitor the assessment and mitigation of climate-related risks in the financial institution in question. As part of this process, concerns about the suitability of specific members of the management body to lead this process, may be addressed.

However, it is also noted that board members face many uncertainties assessing and mitigating climate-related risks in their companies. Climate change does not only leads to increasingly unpredictable weather conditions, but also to many changes and proposed changes in the legal and regulatory environment as well as rapidly changing “clean” technologies and consumer preferences. A lot of questions are still unanswered, including the concept of sustainability itself.

As board members are exploring this relatively unfamiliar territory and face new risks and challenges, financial supervisors may find that some of their most important tasks are to assist and guide the financial sector as much as possible, providing guidance on how sustainability considerations can be effectively embodied in daily business operations and building up their own expertise along the way. So, while Dutch regulation does provide financial supervisors with the legal basis to address climate-related risks in fit and proper assessments, supervisors may well use these tools to stimulate financial institutions to seriously address climate-related risks in their businesses without, however, moving on too soon to the taking of formal enforcement measures.

As it is, planet Earth may be best served by supervisors, board members, employees, clients and consumers combining their efforts and working side by side.