IRELAND Law and Practice Contributed by: Grainne Callanan, April McClements and Aisling Kavanagh, Matheson LLP
It aims to clarify the CBI’s expectations for how (re) insurers address climate change risks in their busi- nesses and to assist them in developing their gov- ernance and risk management frameworks to do so. In its September 2024 Insurance Newsletter, the CBI published the findings of its thematic review of the materiality assessments of 29 (re)insurers. This review illustrated that the majority of firms have made some efforts to meet the guidance, including conducting a broad analysis of potential climate risk exposure across various categories and outlining clear conclu- sions on the materiality of these risks. In October 2024, the CBI published its Flood Protec- tion Gap Report following engagement with key stake- holders, including members of the insurance industry and officials from the Department of Finance and the Office of Public Works. The key findings of the report were that Ireland is likely to see significantly more rain- fall in the future due to climate change, increasing the likelihood of flood events and potentially widening the flood protection gap further. The CBI has stated that the flood protection gap remains a priority. CBI publishes “Our Approach to Supervision” In March 2025, the CBI published a document entitled “ Our Approach to Supervision ”. The Document pro- vides an overview of the Central Bank’s supervisory framework, including details on its supervisory princi- ples and practices, and follows on from the CBI’s ini- tiative regarding the transformation of regulation and supervision, as announced in August 2024. As of January 2025, the CBI has moved to an integrat- ed supervisory model, stating that this approach sets the CBI up for the future, ensuring that the financial system operates in the best interests of consumers and the wider economy. The CBI emphasises the importance of supervision, comprising engagement, analysis and oversight of financial services firms, together with the implementa- tion, monitoring and enforcement of regulations, reit- erating its risk-based, outcomes-focused approach to supervision. Importantly, the CBI highlights firms’ responsibilities regarding risk identification, manage- ment, and mitigation, stating that these responsibili-
ties rest, first and foremost, with boards and manage- ment teams within regulated firms. Sectoral level supervision The Document goes on to address supervision at a sectoral level, stating that each sector (Banking & Pay- ments / Insurance / Capital Markets & Funds) is super- vised in an integrated, holistic way with a multi-year supervisory strategy. Supervision is delivered via a broad range of supervisory actions and interventions, used to prevent or mitigate risks. The Document also sets out examples of programmatic supervision, some of which are as follows: • direct engagement with sectors, firms and individu- als; • thematic reviews, onsite inspections, deep dives/ investigations, risk analysis and assessment; • ensuring firms take appropriate risk mitigation actions to address issues identified; and • firm-specific risk assessments, for example, busi- ness model and strategy risk. Central Bank publishes its 2024 climate observatory On 14 January 2025, the CBI published its Climate Observatory 2024 (“Observatory”). The Observatory provides an update on climate-relat- ed financial and non–financial metrics. The aim of the Observatory is to act as an annual monitor of progress in relation to national decarbonisation and changes in financial sector climate risks. Initially launched in 2023, the 2024 Observatory has been updated as follows: • a new section, part A, addresses global trends in the progression of climate change, mitigation and impact; • part B provides insights into climate risk for banks, insurers and funds using climate–aligned financial sector data. The Observatory also provides an overview of devel- opments regarding: • national policy and sustainable finance;
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