The Basel Committee on Banking Supervision (BCBS) has released a voluntary framework aimed at enhancing how banks disclose climate-related financial risks. The initiative is designed to improve transparency, support risk management, and promote global consistency in climate disclosures across the banking sector.
The framework outlines principles and recommended disclosures on governance, strategy, risk management, and climate-related metrics and targets. It encourages banks to incorporate forward-looking climate scenarios, stress testing, and data-driven insights into their risk assessments and public reporting.
Though not mandatory, the framework serves as a global reference point, especially as various jurisdictions move towards mandatory ESG reporting. It also aligns with existing international standards, such as those set by the Task Force on Climate-related Financial Disclosures (TCFD) and the International Sustainability Standards Board (ISSB).
By guiding banks to systematically assess and disclose climate risks, the Basel Committee aims to foster a more resilient and sustainable global banking system. The framework is expected to evolve over time, incorporating feedback and advancements in climate risk methodologies.
For more details and structured learning, please explore our risk management courses.