The world’s top financial regulators want to coordinate efforts to prepare for potential risks from climate change as authorities still lack common standards for assessing what could be one of the biggest threats facing banks and insurers.

The Financial Stability Board published a roadmap on Wednesday for tackling some of the key challenges in identifying and managing climate risk, notably the availability of data on emissions by companies and adapting to scenarios for how the environmental shift could play out.

Financial firms could face losses on loans and insurance contracts if extreme weather damages factories or polluting companies go out of business in the transition to a cleaner economy. Yet more than five years after political leaders agreed to limit global warming, banks and insurers still don’t face consistent rules.

Regulators in jurisdictions like Europe and the U.S. are also divided on whether banks should be prodded to steer credit away from carbon-intensive industries toward green companies and projects. The FSB’s roadmap is focused on managing risks rather than supporting the transition.

Europe is on a one-way road to sustainable finance and climate neutrality, Mairead McGuinness, the European Commissioner for financial services, said on Tuesday.

In a report to finance ministers and central banks belonging to the G20, a grouping of countries which account for more than 80% of the global economy, the FSB highlighted four policy areas for attention:

  • Comparable climate-related disclosures by companies to help the firms and their stakeholders assess and manage risk
  • Granular data on how physical and transition risks translate into financial risks
  • Regular vulnerability analyses to deal with the “highly uncertain” nature of climate risks
  • Consistent tools and practices for regulators to oversee individual sectors as well as the wider system.

The FSB said the steps set out in its roadmap are indicative and don’t represent commitments either by jurisdictions or by international bodies to individual actions or dates.

–With assistance from Alastair Marsh.