The Financial Stability Board (FSB) is aiming to this summer present the G20 with a “coordinated, forward-looking” roadmap to address climate-related financial risk.

In a letter to the G20 and central bank governors, FSB chair Randal Quarles, vice chair of the US Federal Reserve, indicated that the purpose was to provide “strategic vision, good coordination, and clear communication to the G20 and the public,” which had become more importance as momentum in work on climate change increased.

He said the roadmap would leverage work being carried out by standard-setting bodies and international organisations, while also using the FSB’s “mechanisms to identify vulnerabilities and build consensus on ways forward”.

With a view to the coordination goal, the FSB has invited the Network for Greening the Financial System (NGFS) to participate in its climate-related work, and the FSB will apply for observer status in the NGFS.

“The work we can do to sharpen focus, amplify important messages, and identify areas where agreement on the way forward has been reached – or needs to be reached – will be key in promoting quick progress,” wrote Quarles.

He said he expected the roadmap would cover actions needed over several years and “seek to harness the respective strengths of, and progress made by, the international standard setting bodies and organisations engaged in this critical work”.

The FSB would also coordinate closely with the G20 group on sustainable finance that has been re-established by the Italian G20 Presidency, Quarles said.

The FSB is supportive of the steps being taken by the Trustees of the IFRS Foundation, supported by IOSCO, to accelerate convergence in global sustainability reporting standards with an initial focus on climate.

Alongside the roadmap, the FSB will in July also deliver reports to the G20 on ways to promote consistent, high-quality climate disclosures based on the recommendations of the Task Force for Climate-related Financial Disclosures, and on the data necessary for the assessment of financial stability risks and related data gaps.

The NGFS is an international group of central banks and financial supervisors working as a “coalition of the willing” on climate and green finance issues. Last week it released a host of publications, including its annual report and an overview of sustainable finance market dynamics.

Today the NGFS and one of its research partners announced the launch of a study group on biodiversity and financial stability.

The goal of the research initiative is to establish an evidence-based approach to how central banks and supervisory authorities could fulfil their mandates in the context of biodiversity loss, with a focus on land-use and deforestation.

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