Authors: Simon Dikau (London School of Economics), Nick Robins (London School of Economics), Agnieszka Smoleńska (Polish Academy of Sciences), Jens van ’t Klooster (University of Amsterdam), Ulrich Volz (SOAS, University of London)
Presenter: Simon Dikau (London School of Economics)
Net zero transition plans can be used by prudential supervisors as an additional dynamic instrument to assess, address and bring distant financial risks into the present. To date, transition plans have primarily emerged as non-financial disclosure instrument and as such, their prudential application has been limited. In this article, we discuss the role that transition plans can play in banking supervision. The article outlines steps towards incorporating transition plans into prudential supervision, thereby enabling supervisors to effectively use transition plans as a forward-looking methodology to better manage and overcome some of the challenges associated with climate risks.
