The Basel Committee, a global banking watchdog, has proposed that banks begin publishing detailed information about the impact of climate change on their businesses starting in January 2026, as reported by Reuters on November 29. The goal is to assist investors and regulators in assessing how well banks are managing climate-related risks. The proposed disclosures would allow for easier comparison of climate exposures among banks and ensure that they maintain sufficient capital for stability.

The committee aims to incorporate flexibility into the framework and will decide, based on public consultation feedback, which disclosures should be mandatory and which can be at the discretion of national banking regulators. The proposed framework includes Scope 1, 2, and 3 greenhouse gas emissions, with a focus on financed emissions associated with loans and investments. The committee acknowledges the challenges banks may face in obtaining data from their counterparties. The proposed disclosures complement broader corporate disclosures set by the International Sustainability Standards Board, but it remains unclear how they will align with corporate climate disclosures in regions like the European Union and the United States.

Sources:

https://www.reuters.com/sustainability/sustainable-finance-reporting/global-watchdog-proposes-detailed-climate-disclosures-banks-2023-11-29/