The Reserve Bank of India (RBI) is consulting on the disclosure of climate-related financial risks by organisations under a new regulation regime. The disclosures would cover four thematic areas, including governance strategy, risk management, metrics and targets. “There is a need for a better, consistent and comparable disclosure framework for regulated entities, as inadequate information about climate-related financial risks can lead to the mispricing of assets and misallocation of capital,” the RBI said in a statement. Companies falling into the regime’s scope would be required to provide details on the impact of climate-related risks and opportunities on their business strategy and financial planning, while considering different climate scenarios. Under the framework, organisations would additionally need to disclose how, and to what extent, their processes for climate-related financial risks and opportunities are integrated into their overall risk management processes, as well as provide updates on progress towards climate-related targets. The draft framework is open for comments until 30 April.
Disclosures on governance, strategy and risk management will start from fiscal 2026, and on metrics and targets from fiscal 2028. @RBI https://t.co/FMjWuE23d4
— Regulation Asia (@RegulationAsia) March 1, 2024
