On 12 June 2024, the Monetary Authority of Singapore (“MAS“) and the Bank for International Settlements (“BIS“) announced that through Project Viridis, they have developed a blueprint for a climate risk platform that financial authorities can use to draw nascent insights on climate-related financial risks faced by financial institutions as well as potential systemic stability.
Project Viridis was launched in 2022 as an exploratory project to overcome the challenges of integrating climate data and risks analysis into financial stability surveillance, such as the complex nature of climate change, notable data gaps, and limited understanding of how to measure the associated risks. The announcement of the blueprint marks the conclusion of the project.
The blueprint sets out key features and metrics that are required for a climate risk platform including:
(a) banking and financial system-wide and financial institution-level views of financed emissions;
(b) consolidation of reported and modelled emissions of entities that are key counterparties to financial institutions; and
(c) mapping the geographical distribution of entities’ assets to assess the entities’ transition risk exposure arising from changes in carbon pricing policies and exposure to different physical hazards.
The Viridis climate risk platform is designed to be modular such that future advancements and international alignment on climate data and metrics could be integrated and enrich insights. For details of the platform, please refer to the Project Virdis final report published here.
For more information, please click here for the MAS press release titled “BIS Innovation Hub and Monetary Authority of Singapore Develop Blueprint for a Climate Risk Platform for Financial Authorities”.
