• New voluntary framework guides global banks on disclosing climate-related financial risks.
• Offers flexibility to accommodate evolving data quality and availability across jurisdictions.
• Basel Committee to monitor adoption and other global disclosure practices for potential updates.

The Basel Committee on Banking Supervision has published a voluntary framework for disclosing climate-related financial risks, aimed at internationally active banks and national regulators.

“Jurisdictions are to consider whether to implement it domestically,” the Committee noted, reinforcing that implementation is optional but encouraged.

The framework provides both qualitative and quantitative guidance on how banks can report their exposure to climate-related risks. It intentionally includes flexibility to reflect the nascent and rapidly evolving nature of climate-related data.

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“The accuracy, consistency and quality of climate-related data are evolving, and therefore it is necessary to incorporate a reasonable level of flexibility into the final framework,” the Committee stated.

The Committee also highlighted that multiple metrics—both quantitative and qualitative—may be necessary for a comprehensive view of banks’ exposures, cautioning that disclosures should be interpreted holistically.

Looking ahead, the Basel Committee will monitor developments, including how other climate reporting frameworks are adopted and how banks in member jurisdictions implement disclosure practices.

It will “consider whether any revisions to the framework would be warranted in future,” based on these observations.

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