The Basel Committee on Banking Supervision has issued a set of climate risk guidelines to help financial regulators across the world assess bank preparedness in a co-ordinated fashion.
The Basel paper sets out 18 principles covering corporate governance, internal controls, risk assessment, management and reporting. They were designed so they can be adapted to a diverse range of banking systems depending on the size, complexity and risk profile of the bank or banking sector.
In a statement, the standard setter says: "The Committee expects implementation of the principles as soon as possible and will monitor progress across member jurisdictions to promote a common understanding of supervisory expectations and support the development and harmonisation of strong practices across jurisdictions.
"The Committee has adopted a holistic approach to assessing, measuring and mitigating climate-related financial risks that considers potential supervisory, regulatory and disclosure-related measures for the banking system. The Committee will provide an update on its work across these dimensions in due course."