## Annex 10. Integrating Measures of Sustainable Finance and Climate Change into External Sector Statistics

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---

### A. Introduction
- Increased awareness of the macro criticality of environmental and climate change related risks has led to a surge in demand for data on the financial and economic implications of climate change, including funding activities which contribute to sustainable outcomes.
- International platforms, including through the 2015 Paris agreement, have emphasized making more information available to better assess climate-related risks and opportunities and their financial impacts.
- Objective: to inspire compilers on how the BOP/IIP data can inform demands for data on environment and climate change, with a particular focus on climate change.
- Recommendation: compilation of supplementary BOP/IIP data in support of analysis of financing activities that contribute to achievement of more sustainable outcomes (sustainable finance), consistent with SNA2025 (See SNA Chapter 35: Measuring the sustainability of wellbeing, paragraph 126).
- Scope: the Annex does not introduce a full framework or rigorous conceptual guidance because expert work in macroeconomic implications of sustainable finance and climate change is still evolving.
- Recognition of ongoing international efforts:
  - The G-20 Data Gaps Initiative 3 (DGI-3) is expected to mobilize progress to develop methodological guidance and reporting templates to produce more comparable indicators of green financing via debt securities and equity instruments across the G20 economies.
  - The 2025 SNA includes updates to classification systems addressing emerging issues related to sustainability, climate change, renewable energy, waste and recycling activities, environmental, social progress, governance, or environmental depletion.
- Given the lack of consensus on taxonomies, the Annex does not recommend a single taxonomy but encourages compilers to refer to ongoing international work including DGI-3 and to develop official taxonomies nationally or regionally.
- Future updates: the Annex could be complemented with further guidance reflecting advances in methodology and data availability and development of a broader framework to identify cross-border aspects of sustainable finance and environment and climate change.
- Structure: Section B focuses on sustainable finance and international cooperation grants; Section C introduces other data derivable from the BOP/IIP framework for climate analysis; Section D presents additional climate-related data useful by national circumstances; Section E discusses future work.

### B. Sustainable Finance and International Cooperation Grants
- Context: increasing financing of sustainability-related activities from public and private sources; financing types include debt, equity, financing from own funds, grants, and subsidies. The balance of payments framework conceptually includes cross-border flows of such financing.

- 1) Cross-border investment in financial instruments intended to finance sustainable projects
  - Rationale: financial instruments used for sustainable development (loans, bonds, equities, investment fund shares/units) are the same as for other purposes; separate quantification (for example, value of green bonds) is important for tracking investment in the green and climate/transition economy and informing policy incentives (OECD, Developing Sustainable Finance Definitions and Taxonomies, 2020). (See SNA Chapter 35 Paragraph 35.119)
  - Measurement requires determining which components of different financial instruments should be considered sustainable; this is an active area of research and discussion across public and private fora. Definitions to operationalize sustainable finance should be reviewed as regulatory and reporting requirements change. (See SNA Chapter 35 Paragraph 35.120)
  - Two primary types of sustainable finance are defined:
    - ESG (Environmental, Social, Governance) finance and green finance, with green finance as a sub-set of ESG finance. (See SNA Chapter 35 Paragraph 35.121)
    - ESG finance: finance for activities or projects that sustain or improve the condition of the environment or social or governance practices. Examples: renewable energy projects, green building projects, sustainable agriculture, affordable housing, social infrastructure.
    - Green finance: finance for activities or projects that sustain or improve the condition of the environment.
    - Principle for greenness: positive contribution to the environment, rather than “do no harm.”
  - Compilation recommendation: countries are encouraged to compile measures of ESG finance and green finance as supplementary of which items for the following financial instruments: equity and investment fund shares, debt securities, and loans—under the functional categories direct investment, portfolio investment, and other investment. Relevant breakdowns are shown in Table A10.1 (IIP and BOP).

  - Table A10.1 (Supplementary table for ESG and green financial instruments — IIP and BOP) — items and “Of which” breakdowns:
    - 1 Direct Investment
      - 1.1 Equity and investment fund shares
        - Of which: ESG equity/investment fund shares
        - Of which: Green equity/investment fund shares
      - 1.2 Debt Instruments
        - Of which: 1.2.0.1 Debt Securities
        - Of which: ESG debt securities
        - Of which: Social debt securities
        - Of which: Green debt securities
        - Of which: Sustainability debt securities
        - Of which: Sustainability-linked debt securities
        - Of which: Other ESG debt securities
    - 2 Portfolio Investment
      - 2.1 Equity and investment fund shares
        - Of which: ESG equity/investment fund shares
        - Of which: Green equity/investment fund shares
      - 2.2 Debt Securities
        - Of which: ESG debt securities
        - Of which: Social debt securities
        - Of which: Green debt securities
        - Of which: Sustainability debt securities
        - Of which: Sustainability-linked debt securities
        - Of which: Other ESG debt securities
    - 3 Financial Derivatives
    - 4 Other Investment
      - 4.1 Other equity
      - 4.2 Currency and deposits
      - 4.3 Loans
        - Of which: ESG loans
        - Of which: Green loans
      - 4.4 Insurance, pension and standardized guarantee schemes
      - 4.5 Trade credit and advances
      - 4.6 Other accounts receivable/payable
      - 4.7 SDRs
    - 5 Reserve assets

  - Definitions and measurement scopes (adaptations of general ESG and green finance definitions; see SNA Chapter 35 Paragraph 35.122):
    - ESG debt securities: scope concerns those where the use of the proceeds is restricted to financing or refinancing activities or projects that improve the condition of the environment or social or governance practices or where the issuer agrees to achieve performance objectives that improve those conditions.
    - ESG loans: scope concerns those in which 50 percent or more of the debtor's activities improve the condition of the environment or social or governance practices.
    - ESG equities: scope concerns investments in institutional units in which 50 percent or more of the institutional unit's revenues come from activities that improve the condition of the environment or social or governance practices.
    - ESG investment fund shares: scope concerns funds investing in financial instruments, companies, projects or other funds that intend to achieve performance objectives that improve the condition of the environment or social or governance practices.
    - Green instruments use the same measurement scope but are limited to improving the environment.
  - Compilation priorities and breakdowns:
    - Focus should be placed on recording the stock values for these instruments with transactions recorded as second priority.
    - If possible, provide estimates for all main sectors and sub-sectors.
    - For debt securities, total ESG debt securities may be further broken down to identify social debt securities, sustainability debt securities, sustainability-linked debt securities, and other ESG debt securities.
    - No maturity breakdown would need to be introduced as in the main BOP/IIP tables. (See SNA Chapter 35 Paragraph 35.123)
  - Further guidance: as work evolves, further guidance for addressing measurement challenges in implementing sustainable finance information in BPM7 could be developed. For measurement challenges, see SNA Chapter 35 paragraph 35.124.

- 2) International cooperation grants
  - Additional data on international cooperation grants to low-income countries to finance climate change mitigation and adaptation could be useful to monitor global progress towards meeting climate finance commitments.
  - Nature of climate-related grants: can be current or capital transfers between governments or between international organizations and governments, used by recipient countries to mitigate and adapt to adverse effects of climate change.
  - Considerations: separately identifying climate-related grants by recipient and donor countries could be considered depending on the magnitude, macroeconomic implications for recipient economies, and feasibility of separate identification.
  - Existing international datasets: UNFCCC and OECD include climate-related international grants; the UNFCCC publishes climate finance data received officially from...

### Annex 1 — Using External Sector Statistics to Understand Climate Change Related Risks and Opportunities
- Key framing and objectives (A10.17–A10.20)
  - Climate change poses physical risks (e.g., floods, droughts) and transition risks (e.g., sudden policy changes leading to stranded assets) that can affect financial-sector exposures, asset values, credit risk, operational costs, and create opportunities through technological change and shifts in preferences (A10.17).
  - Risks are forward looking and may not fit neatly within international macroeconomic statistical standards, but external sector statistics (BOP/IIP) can provide useful information to inform policy decisions about climate-related risks (A10.17).
  - The extent of climate implications differs by location, sector, and entity, increasing the need for granular cross-border information on investments and trade to measure potential effects (A10.18).
  - The Section presents initial considerations on national-level data compilations that could support users in understanding climate change in the context of external sector statistics; it is indicative and not intended to create a new data framework (A10.19–A10.20).
  - Items presented are those the balance of payments community initially considers most feasible to compile in the short term as additional details and breakdowns of existing BOP and IIP items (A10.20).

- Suggested cross-border data items and rationale (numbered items 1–6)
  - 1. Direct investment by industrial sectors (A10.21–A10.22)
    - Breakdowns of direct investment by economic activity help assess sector-specific climate-related risks for resident nonfinancial corporations investing abroad, e.g., agriculture and real estate more exposed to physical risks; carbon-intensive sectors more exposed to transition risks (A10.21).
    - Financial corporations are exposed indirectly through foreign lending portfolios (A10.21).
    - BPM7 includes sectoral classification of direct investment by institutional sectors; compilers are encouraged to aim for further granularity of non-financial corporation sectors, aligning with ISIC and going beyond existing classifications to capture climate-change aspects (A10.22).

  - 2. Physical location of investments (direct investment by counterparty country) (A10.23–A10.24)
    - Counterparty country data, combined with location risk profiles (e.g., IPCC, Climate Risk Institute, World Bank country profiles), provides insight into exposures of investors and investee countries (A10.23).
    - Ultimate counterparty ideal; immediate counterparty more readily available and useful. Data may be published bilaterally or as weighted averages (A10.23).
    - Refinement to the (near) physical location of direct investments (e.g., city, postal code) would illuminate physical risk exposure; national-level data remain relevant for macro stability implications (A10.24).
    - Data sources on physical risks at detailed geographical levels are readily available and are being explored; explicit data on physical structures and their financing may require sophisticated modeling (A10.24).

  - 3. Trade in goods related to the transition to a low-carbon economy (A10.25–A10.27)
    - Trade statistics can illuminate movements of environmental risks across supply chains and flows of products for greening production systems or mitigation (A10.25).
    - Information on trade in “environmental goods” and “low carbon technology (LCT) products” could be useful; SEEA CF provides guidance and trade statistics should seek alignment with SEEA CF (A10.25).
    - Consistent data on trade in environmental goods or LCTs can be produced top-down via models, but bottom-up, granular economy-level approaches are preferred for more detailed and comparable results (A10.26).
    - No internationally agreed list of environmental goods or LCTs exists; several lists have been developed, including by the IMF. Further work is needed to avoid interpretation complications across different LCT product lists (A10.26).
    - Analytical indicators that can be derived include:
      - imports and exports of LCT/environmental products
      - trade balance in LCT/environmental products
      - total trade in LCT/environmental products
      - comparative advantage in LCT/environmental products, including by partner economy (A10.27)

  - 4. Trade in services related to the environment and climate change (A10.28)
    - Environmental, agricultural, and mining services components of trade in services are potentially informative.
    - Based on BPM7 (paragraph [11.158-3]), environmental services include waste treatment and depollution services, materials recovery (recycling), sewerage, sewage treatment and septic tank cleaning, waste collection and disposal, remediation, sanitation, treatment of air pollution, and carbon capture and storage services not classified elsewhere (A10.28).
    - SEEA CF guidance on treatment of waste under environmental accounts should be considered when compiling granular data on waste treatment and depollution services (A10.28).

  - 5. Transactions in emission permits (A10.29)
    - Cross-border transactions in emission permits are recorded as other accounts/payable under financial assets (BPM7 paragraph 5.74); for countries with significant cross-border emissions-permit activity, compilers could consider separate compilation and publication of transactions in emissions permits (A10.29).

  - 6. Transactions related to climate-induced natural disasters (A10.30)
    - Disaggregated data on remittances and direct investment in response to specific climate-induced disasters (e.g., reconstruction after a hurricane, remittances to climate-induced migrants) may be feasible and would help assess how direct investment and remittances finance climate change adaptation and inform transition-risk assessment (A10.30).

### Future work and research agenda (A10.31–A10.35)
- Information on sources of financing (A10.32)
  - Compile data on exposure of financing sources (e.g., energy-exporting jurisdictions, flood-prone jurisdictions) to physical or transition risks, as these exposures may affect funding for financial and nonfinancial institutions (A10.32).

- Financial derivatives (A10.33)
  - Compile institutions’ holdings of financial derivatives related to sustainable investments or climate-related risks (including cross-border) to understand hedging practices.
  - Weather-related financial derivatives, and derivatives tied to commodities (e.g., oil, agricultural commodities, tons of CO2 emissions), could be of interest (A10.33).

- Insurance claims and reinsurance (A10.34)
  - Compile total insurance claims, including reinsurance used as a risk-transfer mechanism, especially claims resulting from climate-change-related natural hazards.
  - Under BPM6 (paragraph 13.24), nonlife insurance claims are normally current transfers; exceptionally large claims may be recorded as capital transfers. A simplifying convention is to classify all cross-border nonlife insurance claims as current transfers unless capital-transfer recording is necessary to remain consistent with national accounts.
  - To allow comparability, a supplementary item could capture insurance claims included in capital transfers (A10.34).

- Broader research agenda (A10.35)
  - Further disaggregation of balance of payments flows from a climate-change perspective should be included in the macro standards research agenda (A10.35).

*International Monetary Fund — draft BPM7 Annex 10: Sustainable finance in external sector statistics*

### Annex 10. Integrating Measures of Sustainable Finance and Climate Change

### Annex 10. Integrating Measures of Sustainable Finance and Climate Change into External Sector Statistics

### A. Introduction
- Increased awareness of macro criticality of environmental and climate change related risks has led to a surge in demand for data on the financial and economic implications of climate change, including funding activities which contribute to sustainable outcomes.
- International platforms, including through the 2015 Paris agreement, have emphasized making more information available to better assess climate-related risks and opportunities and their financial impacts.
- Objective: to inspire compilers on how the BOP/IIP data can inform demands for data on environment and climate change, with a particular focus on climate change.
- Recommendation: compilation of supplementary BOP/IIP data in support of analysis of financing activities that contribute to achievement of more sustainable outcomes (sustainable finance), consistent with SNA2025 (See SNA Chapter 35: Measuring the sustainability of wellbeing, paragraph 126).
- Scope: the Annex does not introduce a full framework or rigorous conceptual guidance because expert work in macroeconomic implications of sustainable finance and climate change is still evolving.
- Recognition of ongoing international efforts:
  - The G-20 Data Gaps Initiative 3 (DGI-3) is expected to mobilize progress to develop methodological guidance and reporting templates to produce more comparable indicators of green financing via debt securities and equity instruments across the G20 economies.
  - The 2025 SNA includes updates to classification systems addressing emerging issues related to sustainability, climate change, renewable energy, waste and recycling activities, environmental, social progress, governance, or environmental depletion.
- Given the lack of consensus on taxonomies, the Annex does not recommend a single taxonomy but encourages compilers to refer to ongoing international work including DGI-3 and to develop official taxonomies nationally or regionally.
- Future updates: the Annex could be complemented with further guidance reflecting advances in methodology and data availability and development of a broader framework to identify cross-border aspects of sustainable finance and environment and climate change.
- Structure: Section B focuses on sustainable finance and international cooperation grants; Section C introduces other data derivable from the BOP/IIP framework for climate analysis; Section D presents additional climate-related data useful by national circumstances; Section E discusses future work.

### B. Sustainable Finance and International Cooperation Grants
- Context: increasing financing of sustainability-related activities from public and private sources; financing types include debt, equity, financing from own funds, grants, and subsidies. The balance of payments framework conceptually includes cross-border flows of such financing.

1) Cross-border investment in financial instruments intended to finance sustainable projects
- Rationale: financial instruments used for sustainable development (loans, bonds, equities, investment fund shares/units) are the same as for other purposes; separate quantification (for example, value of green bonds) is important for tracking investment in the green and climate/transition economy and informing policy incentives (OECD, Developing Sustainable Finance Definitions and Taxonomies, 2020). (See SNA Chapter 35 Paragraph 35.119)
- Measurement requires determining which components of different financial instruments should be considered sustainable; this is an active area of research and discussion across public and private fora. Definitions to operationalize sustainable finance should be reviewed as regulatory and reporting requirements change. (See SNA Chapter 35 Paragraph 35.120)
- Two primary types of sustainable finance are defined:
  - ESG (Environmental, Social, Governance) finance and green finance, with green finance as a sub-set of ESG finance. (See SNA Chapter 35 Paragraph 35.121)
  - ESG finance: finance for activities or projects that sustain or improve the condition of the environment or social or governance practices. Examples: renewable energy projects, green building projects, sustainable agriculture, affordable housing, social infrastructure.
  - Green finance: finance for activities or projects that sustain or improve the condition of the environment.
  - Principle for greenness: positive contribution to the environment, rather than “do no harm.”
- Compilation recommendation: countries are encouraged to compile measures of ESG finance and green finance as supplementary of which items for the following financial instruments: equity and investment fund shares, debt securities, and loans—under the functional categories direct investment, portfolio investment, and other investment. Relevant breakdowns are shown in Table A10.1 (IIP and BOP).
- Table A10.1 (Supplementary table for ESG and green financial instruments — IIP and BOP) outlines the following items and “Of which” breakdowns to be compiled:
  - 1 Direct Investment
    - 1.1 Equity and investment fund shares
      - Of which: ESG equity/investment fund shares
      - Of which: Green equity/investment fund shares
    - 1.2 Debt Instruments
      - Of which: 1.2.0.1 Debt Securities
      - Of which: ESG debt securities
      - Of which: Social debt securities
      - Of which: Green debt securities
      - Of which: Sustainability debt securities
      - Of which: Sustainability-linked debt securities
      - Of which: Other ESG debt securities
  - 2 Portfolio Investment
    - 2.1 Equity and investment fund shares
      - Of which: ESG equity/investment fund shares
      - Of which: Green equity/investment fund shares
    - 2.2 Debt Securities
      - Of which: ESG debt securities
      - Of which: Social debt securities
      - Of which: Green debt securities
      - Of which: Sustainability debt securities
      - Of which: Sustainability-linked debt securities
      - Of which: Other ESG debt securities
  - 3 Financial Derivatives
  - 4 Other Investment
    - 4.1 Other equity
    - 4.2 Currency and deposits
    - 4.3 Loans
      - Of which: ESG loans
      - Of which: Green loans
    - 4.4 Insurance, pension and standardized guarantee schemes
    - 4.5 Trade credit and advances
    - 4.6 Other accounts receivable/payable
    - 4.7 SDRs
  - 5 Reserve assets
- Definitions and measurement scopes (adaptations of general ESG and green finance definitions; see SNA Chapter 35 Paragraph 35.122):
  - ESG debt securities: scope concerns those where the use of the proceeds is restricted to financing or refinancing activities or projects that improve the condition of the environment or social or governance practices or where the issuer agrees to achieve performance objectives that improve those conditions.
  - ESG loans: scope concerns those in which 50 percent or more of the debtor's activities improve the condition of the environment or social or governance practices.
  - ESG equities: scope concerns investments in institutional units in which 50 percent or more of the institutional unit's revenues come from activities that improve the condition of the environment or social or governance practices.
  - ESG investment fund shares: scope concerns funds investing in financial instruments, companies, projects or other funds that intend to achieve performance objectives that improve the condition of the environment or social or governance practices.
  - Green instruments use the same measurement scope but are limited to improving the environment.
- Compilation priorities and breakdowns:
  - Focus should be placed on recording the stock values for these instruments with transactions recorded as second priority.
  - If possible, provide estimates for all main sectors and sub-sectors.
  - For debt securities, total ESG debt securities may be further broken down to identify social debt securities, sustainability debt securities, sustainability-linked debt securities, and other ESG debt securities.
  - No maturity breakdown would need to be introduced as in the main BOP/IIP tables. (See SNA Chapter 35 Paragraph 35.123)
- Further guidance: as work evolves, further guidance for addressing measurement challenges in implementing sustainable finance information in BPM7 could be developed. For measurement challenges, see SNA Chapter 35 paragraph 35.124.

2) International cooperation grants
- Additional data on international cooperation grants to low-income countries to finance climate change mitigation and adaptation could be useful to monitor global progress towards meeting climate finance commitments.
- Nature of climate-related grants: can be current or capital transfers between governments or between international organizations and governments, used by recipient countries to mitigate and adapt to adverse effects of climate change.
- Considerations: separately identifying climate-related grants by recipient and donor countries could be considered depending on the magnitude, macroeconomic implications for recipient economies, and feasibility of separate identification.
- Existing international datasets: UNFCCC and OECD include climate-related international grants; the UNFCCC publishes climate finance data received officially from...

*Source: Annex 10. Integrating Measures of Sustainable Finance and Climate Change into External Sector Statistics.*

### Annex 1 Parties to the Convention on an annual basis. Reporting countries provide the reasons for

### Annex 1 — Using External Sector Statistics to Understand Climate Change Related Risks and Opportunities

### Key framing and objectives (A10.17–A10.20)
- Climate change poses physical risks (e.g., floods, droughts) and transition risks (e.g., sudden policy changes leading to stranded assets) that can affect financial-sector exposures, asset values, credit risk, operational costs, and create opportunities through technological change and shifts in preferences (A10.17).
- Risks are forward looking and may not fit neatly within international macroeconomic statistical standards, but external sector statistics (BOP/IIP) can provide useful information to inform policy decisions about climate-related risks (A10.17).
- The extent of climate implications differs by location, sector, and entity, increasing the need for granular cross-border information on investments and trade to measure potential effects (A10.18).
- The Section presents initial considerations on national-level data compilations that could support users in understanding climate change in the context of external sector statistics; it is indicative and not intended to create a new data framework (A10.19–A10.20).
- Items presented are those the balance of payments community initially considers most feasible to compile in the short term as additional details and breakdowns of existing BOP and IIP items (A10.20).

### Suggested cross-border data items and rationale (numbered items 1–6)
1. Direct investment by industrial sectors (A10.21–A10.22)
   - Breakdowns of direct investment by economic activity help assess sector-specific climate-related risks for resident nonfinancial corporations investing abroad, e.g., agriculture and real estate more exposed to physical risks; carbon-intensive sectors more exposed to transition risks (A10.21).
   - Financial corporations are exposed indirectly through foreign lending portfolios (A10.21).
   - BPM7 includes sectoral classification of direct investment by institutional sectors; compilers are encouraged to aim for further granularity of non-financial corporation sectors, aligning with ISIC and going beyond existing classifications to capture climate-change aspects (A10.22).

2. Physical location of investments (direct investment by counterparty country) (A10.23–A10.24)
   - Counterparty country data, combined with location risk profiles (e.g., IPCC, Climate Risk Institute, World Bank country profiles), provides insight into exposures of investors and investee countries (A10.23).
   - Ultimate counterparty ideal; immediate counterparty more readily available and useful. Data may be published bilaterally or as weighted averages (A10.23).
   - Refinement to the (near) physical location of direct investments (e.g., city, postal code) would illuminate physical risk exposure; national-level data remain relevant for macro stability implications (A10.24).
   - Data sources on physical risks at detailed geographical levels are readily available and are being explored; explicit data on physical structures and their financing may require sophisticated modeling (A10.24).

3. Trade in goods related to the transition to a low-carbon economy (A10.25–A10.27)
   - Trade statistics can illuminate movements of environmental risks across supply chains and flows of products for greening production systems or mitigation (A10.25).
   - Information on trade in “environmental goods” and “low carbon technology (LCT) products” could be useful; SEEA CF provides guidance and trade statistics should seek alignment with SEEA CF (A10.25).
   - Consistent data on trade in environmental goods or LCTs can be produced top-down via models, but bottom-up, granular economy-level approaches are preferred for more detailed and comparable results (A10.26).
   - No internationally agreed list of environmental goods or LCTs exists; several lists have been developed, including by the IMF. Further work is needed to avoid interpretation complications across different LCT product lists (A10.26).
   - Analytical indicators that can be derived include: imports and exports of LCT/environmental products, trade balance in LCT/environmental products, total trade in LCT/environmental products, and comparative advantage in LCT/environmental products, including by partner economy (A10.27).

4. Trade in services related to the environment and climate change (A10.28)
   - Environmental, agricultural, and mining services components of trade in services are potentially informative.
   - Based on BPM7 (paragraph [11.158-3]), environmental services include waste treatment and depollution services, materials recovery (recycling), sewerage, sewage treatment and septic tank cleaning, waste collection and disposal, remediation, sanitation, treatment of air pollution, and carbon capture and storage services not classified elsewhere (A10.28).
   - SEEA CF guidance on treatment of waste under environmental accounts should be considered when compiling granular data on waste treatment and depollution services (A10.28).

5. Transactions in emission permits (A10.29)
   - Cross-border transactions in emission permits are recorded as other accounts/payable under financial assets (BPM7 paragraph 5.74); for countries with significant cross-border emissions-permit activity, compilers could consider separate compilation and publication of transactions in emissions permits (A10.29).

6. Transactions related to climate-induced natural disasters (A10.30)
   - Disaggregated data on remittances and direct investment in response to specific climate-induced disasters (e.g., reconstruction after a hurricane, remittances to climate-induced migrants) may be feasible and would help assess how direct investment and remittances finance climate change adaptation and inform transition-risk assessment (A10.30).

### Future work and research agenda (A10.31–A10.35)
- Information on sources of financing (A10.32)
  - Compile data on exposure of financing sources (e.g., energy-exporting jurisdictions, flood-prone jurisdictions) to physical or transition risks, as these exposures may affect funding for financial and nonfinancial institutions (A10.32).

- Financial derivatives (A10.33)
  - Compile institutions’ holdings of financial derivatives related to sustainable investments or climate-related risks (including cross-border) to understand hedging practices.
  - Weather-related financial derivatives, and derivatives tied to commodities (e.g., oil, agricultural commodities, tons of CO2 emissions), could be of interest (A10.33).

- Insurance claims and reinsurance (A10.34)
  - Compile total insurance claims, including reinsurance used as a risk-transfer mechanism, especially claims resulting from climate-change-related natural hazards.
  - Under BPM6 (paragraph 13.24), nonlife insurance claims are normally current transfers; exceptionally large claims may be recorded as capital transfers. A simplifying convention is to classify all cross-border nonlife insurance claims as current transfers unless capital-transfer recording is necessary to remain consistent with national accounts.
  - To allow comparability, a supplementary item could capture insurance claims included in capital transfers (A10.34).

- Broader research agenda (A10.35)
  - Further disaggregation of balance of payments flows from a climate-change perspective should be included in the macro standards research agenda (A10.35).

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_Source: https://www.imf.org/-/media/files/data/statistics/bmp7/draft-chapters/draft-bpm7-annex-10-v7-sustainable-finance-in-ess.pdf_