De Nederlandsche Bank (DNB) executive board member, Steven Maijoor has said he is “concerned about the pace and the amount of action” taken by the financial sector in managing climate and environmental risks.

He acknowledged that some pension funds have shown they recognise the materiality of climate risks in their portfolios in a speech he gave at the Morningstar Sustainable Investing Summit 2023.

He said such pension funds have made progress in including these risks in their risk management frameworks and processes.

“Also, around 50 banks, insurers, pension funds and asset managers in the Netherlands have signed the Climate Commitment. As signatories to this commitment they agree to actively contribute to the implementation of the climate goals set out in the Paris Agreement,” Maijoor said.

“Institutions that have signed this commitment have 18 months to do a number of things. They need to identify operational and attributable greenhouse gas emissions in their lending and investment portfolios. And then they need to set specific targets, for both 2030 and 2050, so that they can align themselves with the trajectories towards net-zero by 2050 or earlier.”

Despite this progress, he said financial institutions are “still a long way from where we need to be. We are not converging fast enough”. In particular, Maijoor said there is less progress on environmental risks.

“As financial institutions, you play a crucial role in our societies. You play an important role in creating sustainable prosperity. So we need you to act urgently. The world needs your help in funding the transition to a carbon-neutral society that is in harmony with nature. And as a financial supervisor, I say: we need you to manage your climate- and nature-related financial risks. They are often two sides of the same coin.”

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