Soon, a new repository to bridge climate risk data gaps

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Last Updated12/10/2024

With climate change said to emerge as one of the significant risks to the financial system, the RBI has proposed to create a data repository namely the Reserve Bank – Climate Risk Information System (RB-CRIS), in two parts.

With climate change emerging as a significant risk to the financial system, the Reserve Bank of India (RBI) has proposed creating a comprehensive data repository known as the Reserve Bank – Climate Risk Information System (RB-CRIS). This initiative aims to address the gap in climate-related data, which is currently scattered and fragmented across various sources.

The RBI has proposed a two-part system for RB-CRIS:
Web-Based Directory:
- This will be a publicly accessible platform on the RBI website.
- It will serve as a directory of climate-related data sources, such as meteorological and geospatial data.
- The directory will help stakeholders locate relevant information and data sources necessary for climate risk assessments.
Data Portal:
- The second part will be a data portal that will host processed datasets in standardised formats.
- Access to this portal will be restricted to regulated entities such as banks and financial institutions.
- Access will be rolled out in phases, ensuring regulated entities can utilise high-quality data for climate risk assessments.

RBI Governor Shaktikanta Das emphasized that climate change poses serious risks to the financial stability of institutions. Regulated entities need to conduct climate risk assessments to ensure the stability of their balance sheets and, by extension, the broader financial system.
High-quality data on local climate scenarios, climate forecasts, and emissions is essential for accurate assessments. The RB-CRIS will provide the much-needed structured and accessible information for these evaluations.

As climate risks become more apparent, the financial system must adapt by integrating climate risk into decision-making processes. The RB-CRIS will help banks, insurers, and other financial institutions:
- Identify vulnerabilities in their portfolios due to climate risks.
- Align strategies with sustainable practices and regulatory guidelines.
- Prepare for future environmental shocks, thereby safeguarding both institutional and systemic stability.
By enabling better access to crucial climate-related data, the RBI aims to equip financial institutions to proactively manage climate risks. This initiative marks an important step towards ensuring the resilience of India's financial sector in the face of evolving climate challenges.