OECD Review on Aligning Finance with Climate Goals 2026

Aligning finance with net-zero emissions and climate resilience supports reaching climate policy goals, increases economic resilience, fosters innovation and enhances energy security. Climate change puts societies, economies, and the financial system at risk. Finance plays a crucial role in achieving low greenhouse gas (GHG) emissions and climate-resilient development, as acknowledged in Article 2.1c of the Paris Agreement (UNFCCC, 2015[1]). On the one hand, finance towards climate solutions needs to be scaled up. On the other hand, investments and financing are needed for the climate transition of high‑GHG sectors, along with reducing exposure and vulnerability to physical climate risks in all sectors, thereby strengthening economic and social resilience.

Robust evidence on progress and opportunities is needed to inform policymakers and investors across economies, who are committed to aligning finance with climate goals. As shown in the first edition of the OECD Review on Aligning Finance with Climate Goals (2024[2]), large data gaps remain to assess the alignment of finance with climate goals. This second edition brings together the best available evidence in three areas that can inform policymaking and investment decisions towards aligning finance with climate goals, namely on the evolving mix of climate-related financial sector policies (Chapter 2), the tracking of the degree of climate alignment of financial flows and stocks (Chapter 3), and the landscape of climate metrics used in the financial sector (Chapter 4).

Policymakers across continents are pursuing different policy playbooks to unlock large, untapped opportunities to transition financial flows. Policymakers globally have continued to expand the number and mix of climate-related financial sector policies, reinforcing trends observed in the first edition of this review. In doing so, countries across geographies adopt different policy playbooks, relying more on mandatory transparency measures, voluntary frameworks, or risk management and supervision tools. Owing to their novelty, empirical evidence on the effectiveness of these policies remains scarce. To incentivise climate-aligned investments, real-economy policies (such as fiscal instruments and regulatory standards) remain core levers, which climate-related financial sector policies build upon but cannot substitute. Since the previous edition, climate alignment has advanced for some financial flows but large opportunities to transition financial flows remain untapped. While real-economy investments in clean energy are on the rise, fossil fuel financing across most financial asset classes continues to outpace low‑carbon financing. Climate-alignment trends of corporate debt instruments are diverging, with growth in green-labelled syndicated loans but shrinking momentum in the greening of bond markets. Data and metrics to track the climate alignment of finance are increasingly available, but gaps remain in identifying transition opportunities and tracking more opaque financial asset classes.

Policymakers can take a range of country-tailored actions to drive the climate alignment of finance and capture untapped investment opportunities stemming from the climate transition. Governments, financial supervisors and central banks can prioritise widening policy mixes based on peer learning, developing co-ordinated data frameworks, and strengthening the evaluation of the effects of policies. Figure 1.1 lists 14 specific actions derived from data-driven evidence produced in this review. As policymakers follow different policy approaches based on their national circumstances, different starting points, and mandates, these actions need to be tailored to those contexts, including by complementing the global analysis presented in this report with jurisdiction-level case studies.

Financial sector policies globally are increasingly integrating climate considerations with the primary aim of managing climate risks to financial stability and upholding market integrity. Between 2000 and 2025, policymakers in 111 countries and EU institutions adopted over 860 climate-related financial sector policies. The potential for climate change to trigger systemic financial instability through concurrent, correlated asset devaluations across sectors and geographies is one motivation for these growing policy interventions. Climate-related financial sector policies pursue financial stability, price stability, market integrity and related objectives, depending on the policy area and authority mandate. While primarily designed to address climate transition and physical risks, such policies can also influence climate outcomes and the financial sector’s capacity to steer capital toward climate innovation, transition opportunities and resilience.

Between 2023 and 2025, policymakers continued to expand the number and mix of climate-related financial sector policies, with central banks taking a more prominent role. Although some policies are being updated or paused, the number of climate-related financial sector policies still grew by over 25% between 2023 and 2025, after a peak in 2020 and 2021. Climate-related transparency policies remain dominant, representing 78% of all policies as of 2025. Prudential policies integrating climate considerations have been taking a growing share of the policy mix (20%), and a limited number of climate-related monetary policies have emerged (2%). Over the past 25 years, central banks adopted 32% of policies, financial supervisors and regulators 28%, and governments 28%. Governments and financial supervisors adopted most policies before the 2015 Paris Agreement, but central banks have since taken on a more prominent role. As policy playbooks expand, co-ordinated frameworks become more important to ensure coherence of policy updates across policy authorities.

Countries across geographies adopt different policy playbooks, placing different weights on transparency measures, voluntary frameworks, risk management and supervision tools. Policymakers in Africa and parts of Asia-Pacific continue to rely relatively more on transparency policies, while shares of climate-related prudential policies are higher in Europe and North America. Within these broad policy patterns, disclosure requirements remain dominant in Europe and Asia-Pacific. North America has the highest share of voluntary frameworks. Africa and Latin America have a higher share of transparency frameworks for specific debt instruments. The use of climate stress tests has become prominent in Eastern Asia and Europe, while the Americas and other parts of Asia rely more on other risk management and supervision tools. A range of countries are widening their climate-related financial sector policy toolkits. Green taxonomies doubled between 2023 and 2025, driven primarily by adoption in emerging markets and developing economies (EMDEs). A handful of countries started implementing ESG scoring policies to improve market integrity and transparency across providers. Moreover, central banks in around 10 countries and the European Central Bank adopted climate-related monetary policies, mainly in Europe but also in Asia. Policymakers need to adapt climate-related financial sector policy mixes to national circumstances, but policy toolkits can still be broadened in many countries, including based on peer-learning with other jurisdictions.

Mandatory disclosure requirements remain core climate-related transparency policies and are increasingly complemented by voluntary frameworks. By 2025, policymakers in 110 countries and the EU had adopted over 670 climate-related transparency policies. Around 30% of these policies are mandatory, the majority of which are disclosure measures. While disclosure requirements represent a quarter of climate transparency policies, they are increasingly combined with voluntary tools, such as climate-related guidelines (33%), frameworks for different financial instruments (20%), and roadmaps (18%). To make these frameworks more effective, governments and financial supervisors need to ensure coherence between climate disclosure requirements for financial institutions and non-financial corporations, as well as collaborate with the private sector to strengthen the role of voluntary tools.

Climate-related transparency policies alone cannot directly reduce GHG emissions and increase climate resilience, but they help close information asymmetries and support capital allocation towards climate innovation and transition. Growing empirical literature suggests that disclosure measures are improving information quality, influencing investor behaviour and steering capital allocation towards climate innovation and transition. Green taxonomies and bond frameworks may promote green financial innovation and attract inflows into funds using those labels, but their additionality is difficult to demonstrate as such policies may respond to investor demand as well as redirect finance from self-labelled funds. To strengthen the impact of such transparency tools, policymakers could pair them with tracking tools that can better distinguish new and additional investments from simple relabelling, as well as with dialogue platforms with private investors to understand their needs and motivations.

Climate transparency policies provide a foundation for improving the effectiveness of other climate-related financial sector policies. Transparency policies are frequently adopted alongside other policies or provide the information needed for further policy development. For example, voluntary guidelines are often adopted to strengthen the implementation of other transparency policies while disclosure requirements may support supervisory expectations or inform asset purchases by central banks. Data-driven evaluations of the effects and scope of existing transparency policies may therefore need to consider their interactions with other relevant policies across authorities. Policymakers could invest in shared data and cross-authority evaluation frameworks to assess how transparency measures interact with other policies and identify opportunities to improve policy packages over time.

Climate supervision practices and stress tests drove the rise of climate-related prudential policies yet expanding their scope and bindingness would better address climate risks, especially in EMDEs. By 2025, policymakers in 57 countries and the EU institutions had implemented around 200 climate-related prudential policies (including transparency-related prudential policies), with the aim of decreasing risks of financial instability. Most were adopted by central banks and apply to banks. Fewer policies target climate risks to insurers and investment funds. Most climate-related prudential policies have taken the form of climate stress tests or scenario analyses and other risk management and supervision tools. There remains much scope to adjust large exposure policies or adopt policies that adjust liquidity requirements to better reflect climate-related risks to banks’ operations. While about a third of policies are mandatory for supervised financial institutions, many remain voluntary, providing general guidance or assessments to identify risks without specific next steps to address them in practice. Many EMDE countries have yet to assess climate risks to their financial system. Coverage of insurance companies and physical risks in climate-related stress tests can be improved.

A growing literature continues to find potential trade-offs between core financial and climate policy objectives for several climate-related prudential policies. Climate-related prudential policies are found to have mixed effects on steering finance towards low-GHG activities, while sometimes bringing trade-offs with financial stability, especially for policies related to the level and quality of capital and risk buffers to strengthen resilience to systemic risks. Limited conceptual research expects potential positive effects across policy objectives for some climate‑related large exposure policies and risk management and supervision practices, although such effects may be small. For example, stress tests increase the awareness of financial institutions on the effects of climate risks, which in some jurisdictions has increased the likelihood that banks provide green loans to high-emitting companies. Given the mixed evidence on the effects of climate-related prudential policies, policymakers can seek to calibrate them carefully, test for unintended consequences and identify designs that strengthen risk management.

As climate-related monetary policies begin to emerge, further scenario and policy analysis is needed to understand their potential effects and inform their design. Climate-related monetary policies primarily aim to help manage the impacts of climate change on price stability. As only a small number of such policies have been adopted, the evidence base remains limited and relies largely on theoretical research and scenario analysis. Overall, findings are mixed and point to potential trade-offs between climate and price stability objectives. Theoretical research on climate-adjusted asset purchases suggests limited effects on monetary policy effectiveness, while potentially increasing green finance flows. Analysis of climate-related credit operation policies points to potential trade-offs between monetary and climate policy objectives, and the importance of robust climate-related definitions.

Effective real-economy climate policies remain fundamental levers for incentivising climate‑aligned investments, which climate-related financial sector policies build upon. Governments mostly rely on climate‑related economic policies, such as taxes and subsidies, but other types of climate‑related policies, including regulatory, government investment and consumption, voluntary approaches, and information, have increased more since the adoption of the Paris Agreement. Recent slowdown in the adoption of new policies may reflect recalibrations of policy mixes towards increased effectiveness. Real-economy climate policies are a prerequisite for enabling private finance, by setting standards, sending signals to investors and providing incentives for low-GHG investments. Instruments resulting in fiscal and financial incentives directly impact net present value and internal rate of return calculations. Consequently, remaining fiscal and financial incentives for fossil fuel production and consumption across jurisdictions continue to contribute to disincentivising climate‑aligned investment decisions. Climate-related financial sector policies cannot substitute fiscal, industrial and infrastructure policy but can act as amplifiers. The effectiveness of climate-related financial sector policies, therefore, depends in part on the credibility, consistency and effectiveness of the broader policy environment.

The share of low-carbon energy investments in total real-economy investments has increased and significantly exceeds the share of fossil fuel energy investments. In 2024, global investments in low‑carbon energy accounted for 7% of gross fixed capital formation (GFCF), outpacing those in fossil fuels, which represented 4%. While more recent data on GFCF are not yet available, low-carbon energy investments exceeded fossil fuel energy investments in 2025 by the largest margin to date. At the same time, the climate alignment of over 85% of real-economy investments is not yet tracked at a global level, as the climate transition of many economic sectors remains difficult to accurately assess systematically. Closing this tracking gap is needed to determine whether rising low‑carbon energy investments are being matched by broader progress in aligning the real economy with climate goals, including by fostering climate transition and innovation.

The rising share of low-carbon energy investments is driven by significant absolute growth in Asia‑Pacific, Europe and North America, especially from the private sector, combined with stagnating fossil-related investments. Growth of low-carbon energy investments since 2020 drove their increasing share in total investments, while fossil-related investments remained relatively stable. At the global level, the private sector represents the majority of investments in low-carbon energy, whereas the public and private sectors are taking up a relatively even share of fossil fuel investments. In 2025 and over the 2021-2025 period, clean energy investments outpaced fossil investments in Asia-Pacific, Europe and North America, but the opposite was observed in all other regions. Lagging low-carbon investments in Africa, Eurasia, Latin America, and the Middle East suggest untapped investment opportunities.

Greenfield foreign direct investment was a sizeable contribution to improved climate alignment of real economy investments in both advanced and emerging economies. Greenfield foreign direct investment (FDI), which involves the construction of new operational facilities, is a significant channel through which cross-border capital influences the real economy in recipient countries over the medium and long term. Between 2016 and 2025, the climate alignment of global greenfield FDI improved. On the one hand, greenfield FDI in renewable energy more than doubled in volume and grew faster than total greenfield FDI, rising from less than 10% of the total to 15%. On the other hand, greenfield FDI in fossil energy was volatile and did not keep pace with overall growth, declining from 14% of total greenfield FDI in 2016 to less than 4% in 2025. Greenfield FDI in renewable energy is no longer concentrated in advanced economies. Between 2021 and 2025, it outpaced greenfield FDI in fossil energy in all regions, although such improved alignment is taking place at different speeds and scales.

Climate alignment has advanced for some parts of the financial system, but trends in the real economy and the financial system have yet to converge. Financial flows and stocks across most asset classes play different roles in financing real-economy investments in climate innovation and transition. In contrast to real-economy investment trends, fossil fuel financing across asset classes continues to outpace low-carbon financing. Where climate-alignment trends of listed equity remained relatively stable since 2022, those of debt instruments fluctuated more. Besides fossil fuels, conventional financing to other GHG‑ and energy-intensive sectors is several multiples of that to low-carbon sectors, pointing to large, untapped opportunities to invest in the climate transition.

Listed corporate equity shares in low-carbon sectors are highest in regions with large stock markets, but considerable scope remains to transition stock markets globally. At the end of 2025, global low-carbon listed equity accounted for one-third of carbon-intensive stocks and was around 5% of total listed equity. These shares have been stable between 2020 and 2025. Over 40% of listed corporate equity is in sectors that are not exclusively low-carbon or carbon-intensive but are particularly relevant for mitigating climate change. North America and Eastern Asia, which represent over 70% of global equity markets, have some of the highest shares (around 6%) of equities in low-carbon sectors. Accounting for only 3% of global markets, Africa, Oceania and Latin America have some of the highest proportions of listed corporate equity in GHG‑intensive sectors (over 20%), reflecting the importance of extractive and energy-intensive industries in their economies.

Low climate alignment of corporate bonds and syndicated loans points to the untapped potential of different corporate debt instruments to finance low-carbon solutions across sectors. In 2025, green corporate bonds accounted for 4% of outstanding corporate bond stock, still below fossil fuel sector bonds at 5%. In terms of flows, issuance of green bonds slightly exceeded traditional bond issuance by fossil fuel sectors for the fourth year in a row, at 4.5% versus 4.2% of total corporate bond issuance. Green syndicated loan flows reached higher levels, at 5% of total loan flows, while lending to fossil fuel sectors was at 6%. At the same time, just under 30% of corporate bond and syndicated loan issuance financed activities in the energy and industrial sectors that were neither green-labelled nor specifically targeted to fossil fuel supply. This points to potential opportunities to steer much larger volumes of corporate debt financing towards transitioning activities, including based on the emergence of transition-labelled bonds.

Climate-alignment trends in corporate debt instruments are diverging, with growth in green‑labelled syndicated loans but shrinking momentum in the greening of bond markets since 2022. Global green corporate bond issuance plateaued after 2022 and did not keep pace with the growth of total issuance. Traditional bonds from fossil fuel sectors fell sharply in 2022 but have since rebounded to levels just below green bond issuance. By contrast, green syndicated loans rose markedly, reaching a record 5% of total loan flows, while syndicated loans to fossil fuel sectors fell to 6%. Still, syndicated loans continue to finance more fossil fuel than low-carbon activities by almost a factor of two.

Regional differences in the climate alignment of corporate debt instruments persist, reflective of varied economic structures and different climate transition needs across sectors. Some regions are capturing opportunities to finance their climate transition through green bonds more than others. Green‑labelled corporate bond issuance in Africa, Europe and parts of Asia-Pacific exceeds traditional corporate bonds issued by fossil fuel companies, while the opposite remains true in some other parts of Asia and the Americas (Figure 1.6). Regions with the highest shares of green corporate bond issuance also have the lowest shares of traditional bond issuance by companies in fossil fuel sectors. Europe is the main driver of green bond volumes. Volumes of green-labelled syndicated loan issuance exceed traditional loan issuance in Eastern Asia and Oceania, while green-labelled syndicated loans represent less than 3% of issuance on average between 2021 and 2025 in North America and Africa. Africa, characterised by overall low volumes, has the highest share of carbon-intensive syndicated loan issuance.

Data and methodological constraints result in very limited evidence on the role of sovereign bonds and private markets in aligning finance with climate goals. Overall data gaps for private equity and bilateral loans, which are typically not covered by disclosure requirements, prevent evaluations of their role in financing climate innovation and transition in the real economy. Besides fiscal revenues, the financing of national budgets heavily relies on sovereign bonds, for which data is widely available. However, green bonds only represented 1% to 5% of total sovereign issuance across regions between 2021 and 2025 and no common approach exists to assess the climate alignment of traditional unlabelled bonds.

Banks still channel more financing to fossil fuels than low-carbon energy but evidence for other types of financial institutions is needed to understand the diverging climate alignment of real‑economy and financial system flows. Bank-facilitated financing to fossil fuels still exceeded low‑carbon energy supply in 2024. However, the gap narrowed since 2021 as banks across all regions captured more green finance opportunities. The highest relative growth in low‑carbon bank-facilitated financing was in Africa, but the largest volume increase occurred in Europe. Evidence on other types of financial institutions, including equity funds, pension funds, sovereign wealth funds, insurance companies and asset managers, remains very partial.

Climate-alignment assessments at the level of financial jurisdictions help map untapped investment opportunities in climate solutions and transition. National collaboration across policy authorities can progressively increase the coverage of climate assessments, notably for private markets and for all types of investors. Voluntary national commitments under the G20 Data Gaps Initiative are expected to yield the first official estimates of green debt securities and listed equities by 2027. Dedicated efforts remain needed to also identify and disclose data and information on finance exposed to high-GHG activities and physical climate risks.

The effectiveness of transparency policies and the credibility of alignment tracking exercises depend on robust metrics. Since the 2015 Paris Agreement, a range of climate metrics have been developed. Data for such metrics have become increasingly available, including based on the growing adoption of climate-related transparency policies. Still, significant gaps to credibly measure climate transition and resilience across financial activities and institutions remain, including to identify opportunities.

The landscape of climate metrics used in the financial sector is increasingly broadening beyond GHG metrics to better capture environmental integrity and economic credibility. Information on portfolio composition, investments and engagements can contribute to assessments of progress towards GHG emissions reduction commitments. Such information also enables the identification of climate-related investment opportunities and tracking of transition planning.

Quantitative metrics tailored to different actors, activities, asset classes and sectors would help inform more impactful investment decisions and effective policymaking. This includes metrics that capture climate transition opportunities for different financial sector activities, such as lending, underwriting, asset owner or manager investing. Some metrics have emerged, such as volumes of investments and lending in climate solutions or green revenue shares of portfolio firms, but they need to be further developed.

Transition metrics for corporate assets are the most established, but do not yet sufficiently identify shifting business models and opportunities. For listed non-financial companies, addressing this gap requires a refinement of metrics on climate-relevant revenues, expenditures, and research and development, as well as sector-specific metrics including on real assets. For unlisted companies in private equity portfolios, metrics need to be adopted in response to larger data and disclosure gaps. Emerging, yet partial, metrics include the energy portfolios of private equity companies and energy supply investment ratios. These corporate metrics can complement climate-alignment assessments based on emissions (targets) and financial flows tracked based on labels and economic sectors.

A progressive integration of adaptation metrics in transition plans enables a more integrated approach to tracking climate performance. Climate-related assessment and disclosure frameworks remain less comprehensive and consistent in addressing adaptation relative to mitigation. Corporate adaptation can be progressively tracked through three sets of metrics: physical risk baseline metrics that measure exposure and vulnerability to physical risks and estimate financial impacts; adaptation input metrics on actions and strategies to build resilience; and resilience outcome metrics that analyse the impact and effectiveness of adaptation actions.

Credible assessments of the climate alignment of bonds face different challenges for corporate and sovereign issuers. Green labelling of corporate bonds contributes to market transparency, but empirical evidence highlights a need for careful evaluation of impact and additionality. Assessment of the environmental integrity of corporate green bonds can be strengthened by insights from metrics on broader corporate activities being developed in the context of transition plans and for assessing transition and general-purpose corporate bonds. For sovereign issuers, while the additionality of green bonds is also being questioned, the critical challenge relates to broadening climate assessments to general-purpose bonds. Such broadening is needed to strengthen the role of public debt in supporting the climate transition. Metrics on sovereign transition planning, sector-specific decarbonisation pathways, and investable national climate plans for both climate change mitigation and adaptation could help close this gap, while reflecting national circumstances.

Investors and policymakers need to tap into innovative data solutions as disclosure by corporates and official bodies alone cannot fill all gaps. Corporate disclosure has significantly improved data availability, yet gaps remain. Innovative data approaches, such as natural language processing (NLP) and geospatial data techniques are increasingly being used by investors, analysts and financial sector policymakers. NLP approaches can extract corporate and publicly available climate data at scale and help construct new metrics to assess climate disclosure quality and greenwashing on that basis. Geospatial approaches can contribute to filling data gaps, improving data comparability across geographies, producing estimates for opaque asset classes and validate reported climate data.

Building on the data-driven findings presented in this report and recognising different national contexts and institutional mandates, policymakers can take a range of co-ordinated and individual actions to build coherent policy playbooks influencing the climate alignment of finance and to better capture untapped transition investment opportunities.

Actions across policy authorities:

• Widen the climate-related financial sector policy mix: Drawing on peer learning with other jurisdictions, identify additional transparency, prudential and monetary policy measures used in other jurisdictions that can fit and be tailored to domestic contexts, considering respective policy objectives and mandates of national authorities.

• Improve the coherence of climate-related disclosure requirements for financial institutions and non-financial companies: Co-ordinate scopes and timelines, including proportionate transparency requirements for more opaque asset classes, such as private equity firms. Encouraging comparable quantitative data on both climate transition and resilience, including metrics that enable the identification of climate transition opportunities. Where possible, develop common digital reporting portals and machine-readable templates to reduce reporting costs and improve data comparability.

• Adopt co-ordinated climate data and evaluation frameworks across national policy authorities: Through defining common indicators and data collaboration arrangements, expand capacities to improve the coverage, quality and policy relevance of data to more consistently track the climate alignment of financial flows and stocks. Develop pilot national assessments of the climate alignment of finance, using indicators that are internationally comparable, to identify policy gaps and untapped opportunities to invest in climate transition and innovation.

• Collect and publish national sustainable finance statistics. Under the leadership of statistical agencies, develop data collection approaches to progressively report statistics on green debt securities, loans, equity and investment fund shares, as part of the National Accounts. Explore options to publish statistics and indicators on both climate-aligned and -misaligned financial flows and stocks, including estimates for more opaque asset classes.

• Provide practical implementation guidance to improve the effectiveness of transparency policies for different types of financial institutions: Implementation guidance can help clarify expectations relating to transparency policies, especially if tailored to different types of financial institutions and the metrics most relevant to their activities. The development of such guidance can be informed by assessments of how transparency measures such as taxonomies and disclosure requirements interact with other policies and whether such policy packages allow to distinguish new and additional investments from relabelling.

Actions by environmental and financial ministries:

• Assess the effects of real-economy policies that play a critical role in incentivising or hindering climate-aligned financial flows: Assess whether real-economy policies create credible pipelines of climate-aligned investment opportunities. Identify critical policies that disincentivise investments in climate transition and innovation. Assess how these policies affect the business case for climate-aligned investments and the effectiveness of climate-related financial sector policies in greening the financial system.

• Strengthen government-backed voluntary partnerships with private investors: Establish or strengthen partnerships with financial sector actors through voluntary initiatives, backed by central governments, to enhance data availability including in more opaque asset classes, strengthen the role of voluntary frameworks, support policy implementation and help build capacity on green finance practices. Use these partnerships to test credible climate metrics, identify investable transition opportunities, track transition plans and inform policy updates.

• Update climate-related transparency policies based on empirical evaluations of their effects: Assess at a regular interval whether climate-related transparency policies decrease information asymmetries, enhance investor decision-making and contribute to increasing investments in climate solutions. Rely on results of such data-driven assessments to update disclosure scopes, metrics and bindingness.

• Publish public climate risk datasets and develop sector transition pathways: Make climate risk datasets publicly available, in collaboration with meteorological and statistical agencies, and develop sector-level transition pathways that can inform investor actions and feed into supervisory stress testing.

• Send market signals through issuing green and transition sovereign debt instruments: Anchor such issuance in robust frameworks and lead by example through annual allocation and impact reporting. Where possible, link green and transition labels to national climate plans and sector-specific pathways.

Actions by central banks and financial supervisors:

• Expand the coverage of climate stress testing across the financial system and share results to inform wider policy playbooks: Conduct both top-down and bottom-up stress tests for climate transition and physical risks. Cover banks, insurers, pension funds and investment funds. Share relevant results with governments, including to inform adaptation and resilience policies, while protecting supervisory confidentiality and central bank independence.

• Conduct scenario analysis and evidence-based assessments of climate-related financial sector policies: Conduct ex ante scenario analysis and ex post empirical evaluations to assess the potential and observed effects of integrating climate considerations into prudential and monetary policies. Test for unintended consequences, identify where trade-offs exist between climate goals and financial stability, and identify designs that strengthen risk management and market integrity.

• Better leverage existing climate-related data and disclosure with innovative data tools: Use geospatial data to complement data reported based on disclosures as well as machine learning approaches to assess the consistency of public climate-related data and claims, which can help identify potential integrity concerns.

• Improve the transparency of climate ratings, physical risk indicators and alignment assessments: Request or encourage ESG rating providers to disclose information on their methodologies, data sources and assumptions to improve the transparency and comparability of climate assessments of financial assets and activities.

[2] OECD (2024), OECD Review on Aligning Finance with Climate Goals: Assessing Progress to Net Zero and Preventing Greenwashing, Green Finance and Investment, OECD Publishing, Paris, https://doi.org/10.1787/b9b7ce49-en.

[1] UNFCCC (2015), The Paris Agreement, https://unfccc.int/process-and-meetings/the-paris-agreement.