German Watchdog Signals Major Shift in Climate Oversight Towards Physical Risks

In a significant pivot in its regulatory approach, Germany's financial watchdog, BaFin, is beginning to focus on the physical risks associated with climate change. This new emphasis comes as part of a broader strategy to ensure that the German financial sector adequately prepares for and mitigates the impacts of climate-related challenges. The move is indicative of a growing global recognition of the need for financial institutions to assess not only transitional climate risks but also the physical risks that climate change imposes on businesses.

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