RBI Proposes New Repository to Address Climate Risk Data Gaps

RBI Proposes New Repository to Address Climate Risk Data Gaps

Sub : Eco

Sec: Monetary Policy

• Introduction of RB-CRIS:
  • The Reserve Bank of India (RBI) has proposed a new data repository called the Reserve Bank – Climate Risk Information System (RB-CRIS).
  • The repository aims to bridge the existing gaps in climate-related data for financial and other regulated entities.

RBI – Climate Risk Information Repository (RB-CRIS)

The Reserve Bank of India (RBI) is launching the Climate Risk Information System (RB-CRIS) to enhance the resilience of the financial system against climate change risks. This system will address the increasing impact of climate-related risks on financial stability and provide a standardized data repository.

Key Features of RB-CRIS: 

• Purpose:
  • RB-CRIS will help regulated entities conduct climate risk assessments by providing high-quality, standardized climate data.
  • It aims to address current data gaps that are often fragmented and lack granularity necessary for comprehensive assessments.
• Two-Part Structure:
  • Public Web Directory: This will list various climate data sources and be accessible to the public via the RBI’s website.
  • Secure Data Portal: This will house processed climate-related datasets in standardized formats. Access will be restricted to regulated entities to improve their climate risk assessments.
• Phased Launch:
  • The rollout will begin with the web-based directory, followed by a gradual introduction of the data portal for regulated entities to ensure smooth adaptation.
• Disclosure Framework:
  • On February 28, 2024, the RBI introduced draft guidelines for a ‘Disclosure Framework on Climate-Related Financial Risks’, requiring regulated entities to disclose climate-related risks across four areas:
• Governance
• Strategy
• Risk Management
• Metrics and Targets
  • The framework helps inform stakeholders (regulators, investors, customers) about climate risks and strategies to manage them.
• Staggered Adoption:
  • The RBI has given regulated entities additional time to establish internal policies and mechanisms for reporting climate-related disclosures.
  • The disclosure requirements vary based on the size and complexity of the entities, with basic disclosures mandatory for all, while enhanced disclosures remain voluntary for smaller entities.

This initiative aims to make climate risk data more accessible and actionable for financial entities, contributing to stronger climate resilience within India’s financial system.