RBI to set up a repository of information on climate risks
Notable because
The RBI is proactively addressing climate-related financial risk. It has released four guidance documents on climate risk so far. In continuation of these efforts, the RBI most recently announced plans to release guidance on scenario analysis and stress testing. These climate risk assessment tools are often hindered by gaps in high-quality data, as already highlighted by REs in RBI's Survey on Climate Risk and Sustainable Finance (2022). The new depository aims to bridge these gaps.
What to look out for in the months ahead
Regulated Entities would be the primary users of the data repository. The platform aims to enable them to implement climate-related disclosure norms and conduct risk management assessments effectively. Will it also prompt the RBI to integrate climate considerations into prudential regulations? Additionally, might these developments prompt the RBI to integrate climate risk considerations into other aspects to address climate risks across the financial system?