New partnership between BIS and MAS targets climate risks in finance


The Bank for International Settlements (BIS) and the Monetary Authority of Singapore (MAS) have recently collaborated on an innovative initiative.

The BIS, an institution dedicated to fostering international monetary and financial cooperation, and the MAS, Singapore’s central bank responsible for monetary policy, financial regulation, and supervision, have teamed up to tackle a pressing global challenge.

Their partnership aims to develop a blueprint for a climate risk platform designed to integrate regulatory and climate data. This platform will enable financial authorities worldwide to better identify, monitor, and manage climate-related risks within the financial system.

The BIS, through its Innovation Hub Centre in Singapore, is addressing financial stability concerns posed by climate change. The MAS adds its regulatory expertise and focus on sustainable finance to the effort. Both institutions recognize the complex challenges posed by climate change, including significant data gaps and the difficulty of assessing associated risks.

Project Viridis, led by the BIS Innovation Hub, outlines the essential features and metrics of the proposed climate risk platform. This platform is designed to provide comprehensive data on financed emissions, exposure to physical risks, and forward-looking assessments under various climate scenarios. As the impact of climate change on global financial markets escalates, adaptive and innovative responses are necessary.

The partnership also leverages advanced technologies such as natural language processing to extract and analyze climate-related data from corporate disclosures. This enables a deeper understanding of financial institutions’ climate-related risks and identifies potential areas requiring more intensive risk assessment.

Maha El Dimachki, head of the BIS Innovation Hub Singapore Centre, stated, “Project Viridis demonstrates how regulatory data can be integrated with climate data, extracted from corporate disclosure documents using natural language processing techniques. This provides authorities with insights into climate-related financial risks, helping them form an initial view of financial institutions’ risk exposures and identify areas that may require deeper risk assessment.”