BPI and FSF Comment on the Basel Committee on Banking Supervision’s Pillar III Climate Disclosure Framework

Ladies and Gentlemen:

The Bank Policy Institute[1] and the Financial Services Forum[2] appreciate the opportunity to comment on the Basel Committee on Banking Supervision’s (“BCBS”) Consultative Document seeking views from the public and market participants regarding a proposed Pillar 3 disclosure framework for climate-related financial risks (referred to herein as the “Pillar 3 climate disclosure framework”).[3]

Executive Summary

We appreciate the BCBS’s efforts to “analys[e] how a Pillar 3 disclosure framework for climate-related financial risks would further its mandate to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability.”[4] We support the BCBS’s goal of “promot[ing] comparability of banks’ risk profiles and enabl[ing] market participants to access key information relating to a bank’s risk exposures in relation to climate-related financial risks.”[5] Our members are actively evaluating climate-related financial risks and their potential impacts, and are devoting substantial resources to developing risk management capabilities to identify, measure and mitigate these risks. In the context of general corporate disclosures, many of our members already publish extensive climate-related information, including with respect to climate risk management. These actions are part of a trend by companies to increasingly disclose climate-related information to be responsive to requests from investors, consumers, employees and international authorities.

We agree with the objectives of Pillar 3 disclosures as currently set out: “to promote market discipline and enable market participants to access key information relating to a bank’s regulatory capital and risk exposures in order to increase transparency and confidence about a bank’s exposure to risk and the overall adequacy of its regulatory capital.”[6] We note that the Consultative Document does not contain any discussion of intent to change the objectives of the Pillar 3 disclosure framework.

To read the full comment letter, please click here, or click on the download button below.

[1] The Bank Policy Institute is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.

[2] The Financial Services Forum is an economic policy and advocacy organization whose members are the chief executive officers of the eight largest and most diversified financial institutions headquartered in the United States. Forum member institutions are a leading source of lending and investment in the United States and serve millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, financial inclusion, deep and liquid capital markets, a competitive global marketplace, and a sound financial system.

[3] BCBS, Consultative document, Disclosure of climate-related financial risks (Nov. 29, 2023) (“Consultative Document”), https://www.bis.org/bcbs/publ/d560.pdf.

[4] Consultative Document, at 1.

[5] Id. at 4.

[6] Id. at 3.