The Basel Committee on Banking Supervision has released comprehensive guidelines aimed at assisting financial regulators globally in evaluating the preparedness of banks for climate-related risks in a coordinated manner.
The document outlines 18 key principles focused on various aspects such as corporate governance, internal controls, risk assessment, management, and reporting. These principles are designed to be flexible, allowing for adaptation across different banking systems, taking into account the unique size, complexity, and risk profile of individual banks or banking sectors.
In its announcement, the Committee emphasized the urgency of implementing these principles and signaled its intention to monitor progress among member jurisdictions. This approach aims to foster a unified understanding of supervisory expectations while promoting the development and harmonization of robust practices across regions.
The Committee has adopted a comprehensive strategy to assess, measure, and mitigate climate-related financial risks, which encompasses potential supervisory, regulatory, and disclosure measures affecting the banking industry. Further updates on their ongoing efforts in this area will be provided in due course.