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Bank of Russia develops recommendations for climate risks accounting for financial institutions

6 December 2023

The document recommends that financial institutions analyse arising climate risks based on potential scenarios and create systems for monitoring these risks. The recommendations also describe measures to reduce adverse implications of such threats and approaches to information disclosure.

Russia’s main trading partners, including friendly countries, continue the transition to a low-carbon economy and are introducing new climate control measures that, in the future, will influence international trade. The Russian economy is also vulnerable to climate risks due to its high carbon intensity and geographic factors. In particular, climate change-related natural hazards are becoming increasingly more frequent and destructive.

All these vulnerabilities may adversely affect non-financial companies’ profit and asset value, households, and other clients of financial institutions, which could pose systemic threats.

In 2024, the Bank of Russia plans to prepare additional recommendations for banks regarding how to take such risks into account in internal capital adequacy assessment procedures.

Preview photo: Yury Smityuk / TASS
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