Sweden: Financial Sector Assessment Program–Technical Note on Supervision and Disclosure of Climate-Related Risks

IMF Staff Country Reports, April 5, 2023

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Paper discusses the technical note on Supervision and Disclosure of Climate-Related Risks for the Sweden Financial Sector Assessment Program.
Swedish banks are mainly exposed to the effects of climate change through loans that are collateralized by real estate properties and lending to high-emission industries.
Finansinspektionen (FI) has undertaken a number of positive initiatives aimed at integrating climate-related risks and wider sustainability issues into its supervisory processes.
Some gaps remain that need to be gradually addressed by FI to ensure full integration of climate-related risks into supervisory processes.
Actions to further integrate climate into the supervisory process should be prioritized based on:
- the vulnerability of the Swedish banks, and
- progress at international level in addressing challenges that are not unique to Sweden.
FI should, in a proportional manner, formalize and expand collaboration and information sharing arrangements with other Swedish Agencies involved in climate-related work.

Primary channels of exposure for Swedish banks:
- loans collateralized by real estate properties
- lending to high-emission industries
FI has made positive progress in integrating climate-related risks and sustainability into supervision, but gaps remain.
Integration priorities should reflect bank vulnerability and international developments.

Gradually address remaining gaps to achieve full integration of climate-related risks into supervisory processes.
Prioritize specific supervisory actions based on:
- the vulnerability of Swedish banks, and
- international progress on common challenges.
Formalize and expand, in a proportional manner, FI’s collaboration and information sharing with other Swedish Agencies involved in climate-related work.