Financial regulator to add sustainability and competitiveness to regulatory environment

Latvia's financial sector regulatir, the Financial and Capital Market Commission (FKTK) has developed its sustainability strategy to "purposefully promote the development of a sustainable, stable and sound Latvian financial sector, a reliable and respectful relationship with the society, as well as to implement socially responsible organizational principles" it said February 24, describing sustainable development as "one of the FKTK's priorities this year."

Kristīne Černaja-Mežmale, a member of the FKTK board, said: “The global Covid-19 pandemic leads to changes, and current policies of the European Union and its Member States are not only responding to overcoming the effects of Covid-19, but also highlighting the presumed development vectors where changes need to be promoted, with a significant emphasis on mitigation of the climate change impacts and promoting digitisation. It is important to introduce these directions also in the forthcoming steps of Latvia’s development. The role of financial sector is of great importance in raising common awareness of sustainable finance in the climate, social and governance dimensions.”

The regulator will "encourage dialogue with the financial sector encouraging the financial and capital market participants to implement sustainability principles in their operational strategies and products. Besides, the FCMC is planning to add sustainability and competitiveness aspects to the regulatory environment," the regulator said, without giving specifics of what additional regulations might be introduced.

"As the financial sector regulator, we need to use the supervisory tools at our disposal to ensure the preparedness and resilience of financial institutions to all types of risks, including climate change," said Kristīne Černaja-Mežmale.

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