G20 watchdog scales back climate risk policy push amid U.S. retreat

The Financial Stability Board (FSB), the G20’s financial regulator, has paused further climate policy work as the United States distances itself from key initiatives.

In an update to its 2021 climate roadmap, released during a G20 finance ministers' meeting in South Africa, the FSB pledged continued coordination and data sharing on climate-related financial risks but signalled a halt in new regulatory initiatives.

“While many members feel there is a need for more work, some members feel that the work completed to date is sufficient,” the FSB said, indicating divisions among member countries.

The U.S. Treasury’s absence from climate-focused groups and Treasury Secretary Scott Bessent’s reported no-show at the G20 meeting underscore Washington’s retreat from multilateral climate finance efforts.

Although the FSB will continue to monitor climate risks and support coordination among member institutions, it will no longer lead significant new supervisory or regulatory work in this area.

Progress made since 2023 includes assessments of transition planning, nature-related financial risk tracking, and improved tools to quantify losses from climate shocks such as wildfires and heatwaves.

The FSB will revisit climate-related topics annually, leaving future initiatives to its evolving work programme.

Copied