Deadline: 20-Jul-22

The International Network for Sustainable Financial Policy Insights, Research and Exchange (INSPIRE) has announced an open call for Research and Policy Project Proposals: Environment-related financial risks and regulatory capital requirements.

The objective of this call is to support prudential regulators and supervisors in creating the evidence base and analytical understanding to enable integration of environment- or climate-related financial risks into their regulatory frameworks. Ultimately, this foundation can enable central banks and supervisors to provide guidance on the mitigation of environmental risk to safeguard financial stability across global capital markets.

The purpose of this call is to commission gold standard research and policy analysis which:

• monitor the latest developments on these risks’ application to the banking and insurance sectors and
• contribute to the academic literature that provides central banks and supervisors with the evidence base for regulatory action on

Topics

Key topics that proposals can address include, but are not limited to:

• The analytical evidence base on the exposure to and materiality of environment and climate risks to provide a foundation for adjustment of prudential frameworks
• The extent to which environmental risks are captured, wholly or in part, by current regulatory frameworks, building on and globally expanding upon the existing work in the EU and UK
• The use of regulatory capital as a tool to ensure firms’ alignment with supervisory expectations related to environmental risks, including governance and risk management responses
• Adjustment of regulatory capital frameworks to integrate environmental risks and the legal framework implications in different jurisdictions
• Identification of the most relevant environment, and especially, climate risk transmission channels that will need to be taken into account for regulatory capital frameworks
• The use of system-wide capital buffers to address environmental risks
• Quantification of risks related to underwriting, lending, and investing to either high-carbon sectors or high-emitting jurisdictions to reflect climate-driven changes in risk profiles
• Adjustments to the wider prudential regime, outside of the capital framework, to enhance the supervision and risk management of environment- and climate-related risks
• Incorporation of insurance-specific climate risks in supervisory frameworks

Funding Information

In this targeted call, INSPIRE aims to support several projects with an individual budget of approximately $30,000 to $50,000.

Eligibility Criteria

• INSPIRE accepts proposals from all institutions conducting research, including academic-scholarship, nonprofit organisations, non-government organisations, and international financial and monetary institutions.
• They recommend research that is conducted in partnership with financial institutions and can work in cooperation between multiple organisations.
• They welcome research oriented around emerging economies and/or the global south.
• Women and minorities are encouraged to apply.

For more information, visit https://inspiregreenfinance.org/calls-for-research/june-2022-climate-risk-considerations-in-regulatory-capital-requirements/