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 letter to share good industry practices for integrating climate-related risks into authorized institutions' internal capital adequacy assessment processes and capital planning. The regulator highlights key approaches including the identification of material climate risks through structured frameworks, the augmentation of capital adequacy assessments with quantitative stress testing, and the application of results to devise concrete action plans. Authorized institutions are expected to review their existing frameworks and enhance them in light of these supervisory observations to strengthen their overall climate risk management capabilities.