This report aims to support De Nederlandsche Bank (DNB), the central bank of the Netherlands, in assessing risks stemming from financial institutions’ net-zero commitments. Failing to align with net-zero commitments may expose financial institutions to legal and reputational risks as well as other prudential risks driven by climate-related risks. This report develops a supervisory framework for assessing these risks.
Chapter 1 sets out the report’s objective, analytical approach and structure, and explains why risks stemming from net-zero commitments may be relevant for prudential supervision.
Chapter 2 reviews the main climate-related disclosure frameworks relevant for Dutch financial institutions. It covers frameworks designed to support prudential risk assessment, as well as other relevant frameworks that may also provide useful information for supervisors.
Chapter 3 examines the climate-related information financial institutions currently disclose in practice based on a detailed review of disclosures from 43 Dutch and other European financial institutions. These disclosures provide insight into the metrics and indicators institutions use to manage climate-related net-zero transition risks. The chapter reviews public disclosures by Dutch financial institutions, including banks, pension funds and insurers, and assesses how this information may support assessment of net-zero commitments.
Chapter 4 discusses the practical challenges supervisors face when relying on climate-related disclosures. It highlights limitations in comparability, methodology and data quality, as well as potential blind spots that may limit supervisors in assessing net-zero commitments and related risks. The chapter also explains how DNB, and by extension other supervisors, may use internal data to address these challenges. It also identifies remaining obstacles and sets out considerations for supervisors and policy makers.
Chapter 5 develops a monitoring framework that DNB can use to assess legal and reputational risks stemming from financial institutions’ net-zero commitments, as well as other prudential risks that may arise where alignment with net-zero pathways is delayed or insufficient. It includes guidance for quantitative and qualitative assessment, including governance and risk-management practices.
The analysis is based on a detailed review of public disclosures by 43 Dutch and European financial institutions, as well as a cross-country analysis of selected indicators using the OECD Corporate Sustainability dataset.
This report was funded by the European Union via the Technical Support Instrument, and implemented by the OECD, in co-operation with the European Commission’ Reform and Investment Task Force (SG REFORM). It was developed by the Capital Markets and Financial Institutions Division of the OECD Directorate for Financial and Enterprise Affairs. It was prepared by Devran Zeyrek, John O’Shea and Valentina Cociancich, under the supervision of Caio de Oliveira, Head of the Sustainable Finance and Corporate Governance Team, and Serdar Çelik, Head of Division. The project benefited from collaboration and contributions from DNB. Feedback from the Dutch Ministry of Finance, the Netherlands Authority for the Financial Markets, the European Central Bank, the European Banking Authority, the OECD Working Party on Sustainable Finance and Dutch financial institutions was also considered in preparing the report.