RBI invites comments on the “Draft Disclosure framework on Climate-related Financial Risks, 2024”

## Report on the Reserve Bank of India's Draft Disclosure Framework on Climate-related Financial Risks, 2024 **1. Executive Summary:** This report analyzes the Reserve Bank of India's (RBI) Draft Disclosure Framework on Climate-related Financial Risks, 2024, based solely on the provided press release. The framework aims to establish guidelines for disclosing climate-related financial risks. The press release invites comments and feedback on the draft guidelines from specified financial institutions by April 30, 2024. Key findings indicate the framework is intended to apply broadly across various banking and non-banking financial entities, excluding certain smaller institutions. The implementation details and specific contents of the disclosure framework itself are not available within this press release, but its purpose is clearly focused on climate-related financial risks disclosure. **2. Introduction:** The purpose of this report is to provide an overview and analysis of the Reserve Bank of India’s (RBI) Draft Disclosure Framework on Climate-related Financial Risks, 2024, based on the information contained in the RBI’s press release dated February 28, 2024. This report aims to inform affected financial institutions about the key aspects of the draft framework mentioned within the press release. **3. Policy Overview:** * This is a new policy initiative. * **Core Objective(s):** To establish a disclosure framework on climate-related financial risks (as stated in the press release). **4. Background and Rationale:** * **New Policy:** The press release does not explicitly state the problem this policy addresses. However, it can be inferred that the RBI recognizes the growing importance of climate-related financial risks and the need for financial institutions to disclose these risks. This suggests a perceived gap in current reporting practices and a desire to improve transparency and risk management within the financial sector regarding climate change. **5. Key Provisions / Changes:** * **New Policy:** The press release announces the release of draft guidelines on a disclosure framework for climate-related financial risks. * It specifies that the draft guidelines are available on the RBI website. * The policy invites comments and feedback on the draft guidelines. * A deadline of April 30, 2024, is set for submitting comments. * Comments should be sent via email with a specific subject line. **6. Target Audience and Stakeholders:** Based on the text, the target audience and stakeholders directly affected by this draft disclosure framework include: * All Scheduled Commercial Banks (excluding Local Area Banks, Payments Banks and Regional Rural Banks) * All Tier-IV Primary Urban Cooperative Banks * All All-India Financial Institutions (EXIM Bank, NABARD, NaBFID, NHB and SIDBI) * All Top and Upper Layer Non-Banking Financial Companies (NBFCs) **7. Implementation Aspects (Inferred):** * **Responsible agency/bodies:** The Reserve Bank of India (RBI) is the responsible body. * **Timelines:** Comments and feedback are to be submitted by April 30, 2024. * **Procedures:** Comments are to be submitted via email with the subject line "Comments on Disclosure framework on Climaterelated Financial Risks, 2024". **8. Expected Outcomes / Impact of Changes:** * **New Policy:** The likely intended outcome is to establish a standardized framework for financial institutions to disclose climate-related financial risks. This is likely intended to improve transparency, promote better risk management practices within the financial sector, and potentially inform regulatory and supervisory actions related to climate change. The framework aims to better inform financial decision-making related to climate risk. **9. Conclusion:** The Reserve Bank of India's Draft Disclosure Framework on Climate-related Financial Risks, 2024, represents a significant step towards integrating climate risk considerations into the Indian financial system. This draft policy aims to bring transparency regarding climate risk exposure from financial institutions. By soliciting feedback and setting a clear timeline, the RBI is taking steps towards implementing a standardized reporting framework. Affected institutions are encouraged to review the draft guidelines on the RBI website and provide their feedback by the specified deadline.

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