Basel Committee’s voluntary climate risk disclosures: One step forward, two steps back.

13 June 2025 - 17:30 h

Press Release

The Basel Committee today published its framework for the voluntary disclosure of climate-related financial risks. While Finance Watch welcomes the Committee’s continued attention to climate risks, the decision to make the framework voluntary, ‘for jurisdictions to consider’, is a serious step backwards. It is a political concession to certain jurisdictions and must not be seen as a signal to roll back disclosure commitments elsewhere.

“The voluntary framework marks a clear shift from the Basel Committee’s earlier direction. It was made voluntary to appease domestic political concerns while maintaining the illusion of a common global standard. But if jurisdictions diverge, the coordinated global approach needed to manage climate risk is fundamentally undermined.”

Julia Symon, Head of Research and Advocacy

The disclosure framework includes useful components, asking banks to report whether they have climate targets, transition plans and to disclose progress towards these goals. It also includes requirements to explain whether performance metrics are linked to executive remuneration. But these recommendations are only useful if they are implemented.

“Finalisation of the global prudential disclosure standard is a positive step in the current geopolitical environment, but relying on the goodwill of the jurisdictions will not suffice. Without clear, consistent data, supervisors are flying blind, unaware of the real risks building up on balance sheets. A well-defined, widely applied disclosure framework is essential, not just to promote comparability, but to enable effective risk identification, assessment and mitigation. ”

Julia Symon, Head of Research and Advocacy

While Finance Watch welcomes multilateral efforts to develop climate disclosure standards, the final framework introduces concerning deviations from the 2024 consultation draft.

“In the 2023 draft, banks would have been required to disclose greenhouse gas emissions no matter what. In the final version, they only need to do so if they consider those emissions financially material, and different banks will define materiality in different ways. On top of that, the final standard drops all disclosures related to banks’ capital markets and advisory activities.”

“We’re seeing one step forward, two steps back. As climate risks intensify, the momentum for coordinated action is fading. But climate change affects banks everywhere, and those banks are deeply interconnected. When one jurisdiction treats climate risks as optional, it raises financial stability risks for everyone.”

Julia Symon, Head of Research and Advocacy