![]() It stipulates an explicit consideration of climate change related risks as part of sustainability risks as a component of existing risk types in banks/insurers/pension funds/asset managers’ risk management. This guidance provides comprehensive information on climate change related risk and includes detailed good practice (incl. The German supervisory authority BaFin has in December 2019, after a consultation phase, published its Guidance Notice on Dealing with Sustainability Risks. Regulatory initiative on integrating a comprehensive perspective on climate change related risks across the German government and its financial supervisory authorities has recently advanced. SUPERVISION, RISK MANAGEMENT AND SYSTEM STABILITY. ![]() supporting the implementation of its hydrogen strategy through a dedicated investment package. In light of the Covid-19 pandemic, the German Government included further incentives to support green finance in its recovery package, e.g. The KSG affirms the goal of working towards climate neutrality by 2050 and sets emission reduction targets of minus 55% by 2030 compared with 1990 emission levels. Germany has further adopted its Climate Change Act (Klimaschutzgesetz – KSG) in December 2019. Next to KfW, Germany issued its first-ever sovereign green bond in September 2020, raising 6.5 billion Euros. KfW has been actively supporting the green bond market by issuing green bonds regularly since 2014. The government has long been providing financing instruments and subsidies, with the German development bank KfW as a key distributor of incentives. ![]() Next to its own actions, Germany benefits from the EU sustainable taxonomy and the planned EU Ecolabel for financial products as similar public initiatives are currently neither in place nor planned at the national level. The German government could introduce a more granular plan and a clear transition pathway to decarbonise its economy along the Paris Agreement and align its investment decisions with that plan. The German enabling environment could benefit from a more active role on climate-related disclosure by the German central bank (Bundesbank). Despite revised targets for renewables, there have been no additional incentives for financing green energy projects. ![]() Germany has improved its enabling environment. ![]()
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