Basel committee committed to climate disclosures, despite US pushback

The Federal Reserve and other US regulators are not supporting a global framework that requires banks to disclose their climate risk, leaving the proposal in limbo.
The Basel Committee on Banking Supervision has proposed rules that would require banks to report detailed information on the impact of climate change, including physical and transition risks, but these rules have reportedly been watered down.
The US has been pushing back against international progress on climate change risk disclosures, and its stance is likely to be even more resistant going forward, which could lead to a breakdown in international negotiations and a loss of US leadership on climate change efforts.
The EU has already pioneered many regulatory initiatives around climate change risk, and it is urged to uphold international cooperation to fill the gap left by the US.

The Federal Reserve and other US regulators will not back a global framework that asks banks to disclose their climate risk, leaving the proposal in limbo, Bloomberg first reported. The news leaves questions over whether the US will lose its leadership position in international climate finance talks or if other countries will need to take the lead.

Under the framework proposed by the Basel Committee on Banking Supervision, banks would be required to report detailed information on the impact that climate change could have, including physical and transition risks. The proposed rules include disclosing scope 1, 2 and 3 emissions. However, these rules have reportedly been watered down.

While not legally binding, Basel rules are often used by central banks and regulators to shape regulations. The Fed, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency are all members of the Basel committee.