G20 backs global climate reporting standard

July 12, 2021|Written by Camilla Schramek

The G20 finance ministers and central bank governors will work towards a “baseline global reporting standard” for climate and biodiversity-related financial disclosures.

The announcement comes after a meeting in the climate-vulnerable Italian city of Venice. The move follows recent G7 support for mandatory climate-related financial disclosures. It is also part of a renewed focus on climate change by the G20 under the Italian presidency.

The official communique from the meeting expressed agreement on closer international climate coordination and encouraged international financial institutions to step up efforts to align with the Paris Agreement. It also called for sustainable investment and carbon pricing, and for “the phasing-out of inefficient fossil fuel subsidies that encourage wasteful consumption”.

In addition, the statement emphasised the importance of international climate finance to efforts by developing countries to adapt to and mitigate against climate change, calling for “targeted support for the poorest and the most vulnerable”.

This is the first time the G20 has collectively endorsed carbon pricing as a policy tool in mitigating climate change.

The G20’s communique also welcomed two reports from the Financial Stability Board (FSB). One examines data gaps in monitoring climate-related financial risks, and another outlines a roadmap for addressing these risks.

This roadmap focuses on disclosures, data, vulnerabilities and regulatory practices. It builds on initiatives at standard-setting bodies such as the Network for Greening the Financial System. The document also “sketches out how the FSB can serve as a forum for discussing cross-sectoral and systemic issues and agreeing a way forward”.

The FSB’s roadmap to address climate-related financial risk will feed into the work of the G20’s Sustainable Finance Working Group, which is currently developing a roadmap on sustainable finance for discussion at the G20 leaders summit in October.

This page was last updated September 15, 2021

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