India is set to roll out mandatory climate risk disclosure norms for banks and financial institutions in the coming months, according to government sources cited by Reuters. The move is part of the country’s broader push to align financial regulation with its climate goals and ensure greater transparency on environmental risks within the financial sector.
The upcoming framework is expected to require banks to disclose exposure to climate-related financial risks, stress testing against extreme weather scenarios, and strategies for transitioning to a low-carbon economy.
This initiative, led by the Reserve Bank of India (RBI) and the finance ministry, comes amid growing global pressure on emerging economies to integrate sustainability into financial supervision.
Experts believe the rules will enhance investor confidence, improve risk management practices, and help direct capital toward greener sectors. Once implemented, India will join countries like the UK, EU, and Australia that already mandate climate-related financial disclosures.
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