Context: The Reserve Bank of India proposes to create a data repository namely, the Reserve Bank Climate Risk Information System (RB-CRIS).

• It will serve as a depository for data relating to local climate scenarios, climate forecasts and emissions to help regulated entities (RE) undertake climate risk assessment. 

Background

• On February 28, 2024, RBI had issued draft guidelines for a 'Disclosure Framework on Climate-Related Financial Risks,' requiring regulated entities (REs) to disclose information across four key areas: governance, strategy, risk management, and metrics and targets.

• 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, to bridge the gap in climate-related data that is currently available in a fragmented manner.

About Climate Risk Information System

• It will bridge the gap in climate-related data that is currently available in a fragmented manner.

• Presently the available climate related data is characterised by various gaps such as fragmented and varied sources, differing formats, frequencies and units. 

It will comprise of two parts

• The first part will be a web-based directory, listing various data sources, (meteorological, geospatial, etc.) which will be publicly accessible in the RBI website.

• The second part will be a data portal comprising datasets (processed data in standardised formats). The access to this data portal would be made available only to regulated entities in a phased manner.

• The RBI plans a phased launch of RB-CRIS starting with the web-based directory, followed by a gradual introduction of the data portal for regulated entities to ensure smooth adaptation.

• It is crucial for regulated entities to undertake climate risk assessments for ensuring stability of their balance sheets and that of the financial system. 

• The framework aims to inform stakeholders—such as regulators, investors, and customers—about the climate-related risks faced by REs and their strategies for addressing these issues.