In December 2021, The Hong Kong Monetary Authority issued the Supervisory Policy Manual on Climate Risk Management (“GS-1”), providing guidance to authorised institutions (“AIs”) on new regulatory requirements and expectations for HKMA’s supervision.
This brief outlines regulatory requirements as detailed in the GS-1 manual, and provides KPMG perspectives on how AIs can effectively manage climate-related risks, including:
- Establishing effective risk governance and risk strategy
- Principles for effective risk management
- Recommendations for climate-related financial disclosures
KPMG can support AIs to meet new requirements, including embedding climate considerations throughout their strategy formulation processes, incorporating climate-related risks into their risk management frameworks, and stress testing to ensure effective management of inherent risk and the associated financial impact.
