- Basel Committee issues public consultation on a Pillar 3 disclosure framework for climate-related financial risks.
- Forms part of its holistic approach to address climate-related financial risks to the global banking system.
- The Committee invites submissions on the proposals by 29 February 2024.
The Basel Committee on Banking Supervision today issued a public consultation paper on a Pillar 3 disclosure framework for climate-related financial risks. This work forms part of the Committee's holistic approach to address climate-related financial risks to the global banking system.
The Committee is analysing how a Pillar 3 disclosure framework for climate-related financial risks would further its mandate to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability, and the potential design of such a framework. It is publishing this consultation paper to seek the views of stakeholders on its preliminary proposal for qualitative and quantitative Pillar 3 disclosure requirements that would complement the work of other standard setters, including the International Sustainability Standards Board (ISSB), and provide a common disclosure baseline for internationally active banks.
The Committee recognises that the accuracy, consistency and quality of climate-related data is still evolving, but at the same time, disclosure requirements will accelerate the availability of such information and facilitate forward-looking risk assessments by banks. For this reason, the Committee aims to incorporate a reasonable level of flexibility into a future framework.
In particular, and based on feedback through the consultation process, the Committee will consider which elements would be mandatory and which subject to national discretion. More generally, the Committee notes that the development of a meaningful and robust Pillar 3 framework for climate-related financial risks is likely to be an iterative process.
The Committee invites submissions on the proposals, which should be submitted here by 29 February 2024. All comments will be published on the Bank for International Settlements website unless a respondent specifically requests confidential treatment.
Background:
The Basel Committee is the primary global standard setter for the prudential regulation of banks and provides a forum for cooperation on banking supervisory matters. Its mandate is to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability. The Committee reports to the Group of Central Bank Governors and Heads of Supervision and seeks its endorsement for major decisions. The Committee has no formal supranational authority, and its decisions have no legal force. Rather, the Committee relies on its members' commitments to achieve its mandate. The Group of Central Bank Governors and Heads of Supervision is chaired by Tiff Macklem, Governor of the Bank of Canada. The Basel Committee is chaired by Pablo Hernández de Cos, Governor of the Bank of Spain.
More information about the Basel Committee is available here.
