Banking on Climate Resilience: BIS and MAS Launch Project Viridis to Navigate Financial Risks

Banking on Climate Resilience: BIS and MAS Launch Project Viridis to Navigate Financial Risks

(IN BRIEF) Project Viridis, a collaborative effort between the Bank for International Settlements (BIS) and the Monetary Authority of Singapore (MAS), introduces a groundbreaking blueprint for integrating regulatory frameworks with climate data to address climate-related financial risks. The initiative, outlined in a comprehensive report, aims to equip financial authorities worldwide with the tools needed to identify, monitor, and manage climate risks within the financial system. By leveraging advanced technology architecture and collaborative partnerships, Project Viridis seeks to enhance global financial stability in the face of escalating climate challenges.

(PRESS RELEASE) BASEL, 12-Jun-2024— /EuropaWire/ — In a concerted effort to confront the evolving challenge of climate-related financial risks, the Bank for International Settlements (BIS) and the Monetary Authority of Singapore (MAS) have unveiled the culmination of Project Viridis. This innovative initiative aims to seamlessly integrate regulatory frameworks with climate data to enable financial authorities worldwide to better identify, monitor, and manage climate risks within the financial system.

The project’s report delineates a comprehensive blueprint for a climate risk platform, meticulously crafted at the BIS Innovation Hub Singapore Centre. This platform promises to revolutionize the way financial authorities approach climate risk analysis by amalgamating cutting-edge technology architecture with regulatory insights.

Acknowledging the complexity of climate change and the inherent data gaps, Project Viridis tackles these challenges head-on. The blueprint highlights essential features and metrics necessary for effective climate risk assessment, encompassing critical data on financed emissions, exposure to physical risks, and forward-looking evaluations across diverse climate scenarios.

Maha El Dimachki, Head of the BIS Innovation Hub Singapore Centre, emphasizes the urgency of adaptive strategies in light of the escalating impact of climate change on the global financial landscape. Project Viridis emerges as a pivotal tool in empowering financial authorities with the requisite insights to integrate emerging climate risks into their analyses, thereby fortifying global financial stability.

Celine Sia, Assistant Managing Director (Economics & Knowledge Management) at MAS, underscores the collaborative nature of Project Viridis, emphasizing its role in augmenting regulators’ capabilities to assess climate risk exposures systematically.

Furthermore, Project Viridis exemplifies how regulatory data can be seamlessly fused with climate data extracted from corporate disclosures using advanced natural language processing techniques. This integration furnishes financial authorities with invaluable insights into climate-related financial risks, facilitating a preliminary assessment of financial institutions’ risk exposures and pinpointing areas necessitating further scrutiny.

For further details on the platform and its functionalities, the Project Viridis final report can be accessed here.

Editor’s Note: Project Viridis was first introduced during the BIS Innovation Hub’s workplan in January 2022. For additional information, please refer to the following link. The Viridis platform is underpinned by the Ellipse Data and Knowledge Platform (EDKP), developed collaboratively by the BIS Innovation Hub Singapore Centre and MAS as part of Project Ellipse. The EDKP, which facilitates the integration of structured and unstructured data from diverse sources, is currently undergoing collaborative enhancements by more than 15 central banks and financial regulators globally. Further insights on the EDKP can be found here.

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SOURCE: Bank for International Settlements (BIS)