The Principles constitute a declaration of common understanding among the SFWG members on the minimum standards that they expect to implement in their respective jurisdictions and in line with their legal frameworks in the area of climate risk management.
6.
While the Principles are endorsed by the entire SFWG, it is understood that they are primarily relevant for those members who are financial services regulators. The ministries and exchanges may consider them in the context of their activities, where relevant.
7.
For the purposes of the Principles, financial sector entities are referred to collectively as ‘financial firms’ without drawing distinctions between the various financial service activities offered by these entities. While it is recognised that the BCBS and the NGFS standards are primarily designed for the banking and insurance sectors, the Principles are drafted to cater for a wider spectrum of financial firms and taking into account differences in business models.
8.
It remains in the discretion of each of the financial services regulators to determine the financial firms in scope of the Principles, how to apply each of them and the timeframe to do so in their jurisdictions. However, the relevant financial services regulators intend to commence application of these Principles in respect of their firms not later than from November 2023. The financial services regulators may also introduce additional details relevant for specific types of financial firms, in particular based on the standards cited in the Annex.
9.
It is recognised that several standards in this area are still evolving at international level. This fact has been reflected in the drafting of the Principles allowing for the necessary flexibility and adaptations to future developments.