BIS Innovation Hub and MAS develop climate risk platform blueprint

The Bank for International Settlements (BIS) and the Monetary Authority of Singapore (MAS) have collaborated on a blueprint for a platform integrating regulatory and climate data. This aims to assist financial authorities in identifying, monitoring, and managing climate risks within the financial system. The initiative addresses challenges such as the complex nature of climate change, data gaps, and the need for improved risk measurement.

Overcoming climate impact analysis and reporting challenges

Developed at the BIS Innovation Hub Centre in Singapore through Project Viridis, the blueprint outlines essential features for a climate risk platform, including metrics on financed emissions and physical risk exposure under various climate scenarios.

As the impact of climate change on the global financial landscape intensifies, the need for adaptive and forward-thinking strategies is more urgent. Project Viridis helps equip financial authorities with the insights needed to integrate emerging climate risks into their analysis – and thereby help promote global financial stability.

Representatives from BIS said that Project Viridis is an innovative, collaborative blueprint that leverages technology solutions to systematically track climate-related data and metrices, thereby augmenting regulators' efforts in assessing physical and transition climate risk exposures of individual banks and the financial system. This project addresses a common need of global financial authorities, and we look forward to further collaboration to expand such toolkits.

Also commenting on this project, officials from MAS said it demonstrates how regulatory data can be integrated with climate data, which are extracted from corporate disclosure documents using natural language processing techniques. This provides authorities with insights into climate-related financial risks, helping them form an initial view of financial institutions' risk exposures, and to identify areas that may require deeper risk assessment.