• Basel Committee to Publish Climate Risk Disclosure Framework: A voluntary framework will guide jurisdictions on climate-related financial risk disclosures.
• Extreme Weather Events Now a Priority: Global banking regulators will intensify analysis on the financial implications of climate-driven disasters.
• U.S. Pullback Highlights Global Divide: U.S. regulators scale back climate efforts, while Europe pushes climate risk integration into financial supervision.

Global banking regulators have agreed to intensify efforts to assess the financial risks posed by climate change—particularly from extreme weather events—despite mounting resistance from the United States.

Meeting on May 12, 2025, the Group of Central Bank Governors and Heads of Supervision (GHOS)—the oversight body of the Basel Committee on Banking Supervision—reaffirmed their commitment to implementing all aspects of the Basel III framework and advancing climate-related risk analysis.

“GHOS members unanimously reaffirmed their expectation of implementing all aspects of the Basel III framework in full, consistently and as soon as possible,” the Bank for International Settlements (BIS) stated.

In addition to tracking Basel III reforms, the committee spotlighted climate risk as a strategic priority. The Basel Committee will release a voluntary Pillar 3 disclosure framework for climate-related financial risks. This framework, while non-binding, is expected to set a global standard for national regulators.

“The GHOS tasked the Committee with prioritising its work to analyse the impact of extreme weather events on financial risks,” said BIS.

The move reflects growing transatlantic divergence. European and UK regulators continue to embed climate considerations into banking supervision. The European Central Bank, for instance, has made climate risk management a supervisory priority. In contrast, U.S. leadership has been scaling back.

Under President Donald Trump, U.S. regulators withdrew from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) and abandoned a joint climate risk framework. Analysts expect further rollbacks from the Federal Reserve and FDIC in coming months.

RELATED ARTICLE: Benchmark Supports the SEC Proposed Corporate Climate Risk Disclosure Rule

Despite limited authority, the Basel Committee’s influence shapes global banking norms. Analysts suggest its alignment with European climate goals will pressure national regulators to follow suit—regardless of political headwinds.

“Analysts say its thinking is more closely aligned to European and British regulators… than to those in the United States.”

While the U.S. Federal Reserve has conducted preliminary climate risk analyses, Chair Jerome Powell has emphasized the Fed’s narrow remit. This contrasts sharply with Europe’s broader approach to integrating environmental risk into financial oversight.

“Chair Jerome Powell has repeatedly insisted the Fed has a limited role to play.”

The committee also reviewed whether the Basel framework, particularly around liquidity and interest rate risk, performed as intended during the 2023 banking turmoil—highlighting continued focus on system resilience alongside emerging climate threats.

In the absence of U.S. leadership, the Basel Committee’s push for a global disclosure baseline could become a de facto standard—guiding financial markets toward more robust climate risk transparency.

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