On 15 June 2022, the Basel Committee on Banking Supervision issued principles for the effective management and supervision of climate-related financial risks. The aim is to promote a principle-based approach to improve the banks’ risk management and supervisory practices related to climate-based financial risks. There are 12 principles for the banks and 6 for the Supervisory authorities. The principles cover internal controls, corporate governance, risk assessment, management and reporting.
The principles are adjustable to a range of banking systems and have also received several comments from stakeholders since their origination in 2021. The Basel Committee is expecting the implementation to take place as soon as possible and will access the process across member jurisdictions.
Additionally, the Committee will provide an update on its work in due course and will continue to work together with other international financial standard setters to report on climate-related financial risks.