International coalition, G20, temporarily halts climate change initiatives due to internal disagreements among its members.

The Financial Stability Board (FSB) has announced a pause in the integration of climate change policy initiatives into its work. This decision, which was made earlier this year, comes as the FSB looks to assess climate-related vulnerabilities more thoroughly through a forward-looking framework.

The FSB's report, released in 2025, focuses on physical risks and insurance coverage related to climate change. The document details the progress made since 2023 by global standard setters and regulators like the Basel Committee. However, it does not mention the use of macroprudential tools in addressing climate-related financial risks.

The work on transition plans, previously mentioned as part of the FSB's potential initiatives, is now planned to be carried forward by the Network for Greening the Financial System (NGFS). The NGFS, it should be noted, does not have a formal mandate as a standard-setter.

The FSB's decision to pause integration highlights the limits of global cooperation on this issue. Some FSB members feel there is a need for more work on climate-related issues, while others believe the work completed to date is sufficient. Julia Symon, head of research and advocacy at Finance Watch, stated that the FSB's retreat shows the limitations of global cooperation initiatives.

Symon added that geopolitical tensions jeopardize efforts to prevent a global crisis. Since Donald Trump started his second term as president, the US has withdrawn from several climate initiatives, including the Paris Agreement. This withdrawal has been a significant factor in the ongoing debates within the FSB.

Discussions during an FSB meeting became heated after the US Treasury's interim undersecretary for international affairs expressed that climate should only be a focus if there's proof of imminent financial risk. This stance has been met with criticism from many FSB members who argue that the long-term impacts of climate change cannot be ignored.

The Federal Reserve has left the NGFS, a central bank climate group, further complicating the issue. Work on climate-related topics is continuing in many member countries, according to the FSB.

In 2024, the FSB warned that regulators are overlooking nature-related risks. As the world continues to grapple with the challenges posed by climate change, the FSB's approach to these issues will undoubtedly remain a topic of interest and debate.

This article was last updated on July 18, 2025.