Regulatory Alerts2026-04-09
Added · Updated
Good practices on integrating climate-related risks into internal capital adequacy assessment process and capital planning
The Hong Kong Monetary Authority issued this annex to summarize good practices observed in authorized institutions' integration of climate-related risks into their Internal Capital Adequacy Assessment Process and capital planning. Institutions are encouraged to systematically identify material climate risks using structured frameworks and heatmaps, while augmenting capital adequacy assessments with tailored stress tests and quantitative indicators. Furthermore, the document highlights the importance of linking ICAAP results directly to business strategies and capital allocation decisions to ensure long-term resilience against physical and transition risks.