The MAS and BIS have announced a blueprint for a platform to integrate regulatory and climate data, aiding financial authorities in managing climate risks.
The initiative, known as Project Viridis, aims to address the challenge of incorporating climate risk analysis into financial stability surveillance, the companies said in a media release. These challenges include the complex nature of climate change, notable data gaps, and limited understanding of how to measure associated risks.
Project Viridis intends to demonstrate how regulatory data can be integrated with climate data extracted from corporate disclosure documents using natural language processing techniques.
This integration will provide authorities with “insights into climate-related financial risks, helping them form an initial view of financial institutions’ risk exposures, and to identify areas that may require deeper risk assessment,” the MAS said in its announcement.
The blueprint, developed at the BIS Innovation Hub Centre in Singapore, outlines key features and metrics for a climate risk platform. These include data on financed emissions, physical risk exposure, and forward-looking assessments under different climate scenarios.
Celine Sia, Assistant Managing Director (Economics & Knowledge Management) at MAS, commented, “Project Viridis is an innovative, collaborative blueprint that leverages technology solutions to systematically track climate-related data and metrics, thereby augmenting regulators’ efforts in assessing physical and transition climate risk exposures of individual banks and the financial system.
This project addresses a common need of global financial authorities, and we look forward to further collaboration to expand such toolkits.”
Maha El Dimachki, Head of the BIS Innovation Hub Singapore Centre, added, “As the impact of climate change on the global financial landscape intensifies, the need for adaptive and forward-thinking strategies has never been more urgent.
Project Viridis helps equip financial authorities with the insights needed to integrate emerging climate risks into their analysis – and thereby help promote global financial stability.”
