ABSTRACT
As a part of its responsibilities after joining the Central Banks and Supervisors Network for Greening the Financial System (NGFS) in 2021, the Reserve Bank of India (RBI) released a ‘Draft Disclosure Framework on Climate-Related Financial Risks, 2024’ and sought comments on it. This is the most significant step vis-à-vis (possible) actions to be taken at the level of all regulated entities (RE). The aim of the framework is to “foster (among REs) an early assessment of climate-related financial risks and opportunities and also facilitate market discipline”. It draws heavily from the reports (with due acknowledgement) published by international organisations such as the Basel Committee on Banking Supervision (BCBS) and, in particular, the International Financial Reporting Standards (IFRS) of International Sustainability Standards Board (ISSB).
This chapter has two objectives: (a) given the developments at international organisations such as the ISSB/IFRS, BCBS and NGFS, what can be expected from RBI as the next steps (following the Disclosure Framework on Climate-Related Financial Risks, 2024) towards internalisation of climate risks in the financial ecosystem governed by it; (b) given the experience(s) of other jurisdictions, what these steps (already taken and expected to be taken) may yield towards generating/facilitating flow of funds into projects/activities that can address climate change.
