1、Title bold:Subtitle book 1THE TREATMENT OF PHYSICAL CLIMATE RISKS BY CENTRAL BANKSInsights for the Reserve Bank of IndiaProduct of the India Initiative on Climate Risks and Sustainable Finance(IICRSF)led by Climate Bonds Initiative with its partnes ODI and auctusESGODI Emerging analysis 1 The treatm

2、ent of physical climate risks by central banks Insights for the Reserve Bank of India Sherillyn Raga,Prashant Vaze,Elizabeth Tan and Archie Gilmour September 2024 Key messages Increasing global recognition of climate change impacts has led central banks,financial authorities,and their associations t

3、o set out principles,guidelines and methodological approaches on assessing physical climate risk exposure of regulated entities(REs)._ Practical experience from selected central banks suggests a phased approach with clear timelines to implement physical climate risk assessment policies.Such an appro

4、ach allows for pro-active awareness-raising on climate issues,laying out regulatory expectations and scoping technical capacities and data availability among REs at the early stages of policy development.During the implementation phase,most emerging market central banks find it appropriate to adopt

5、the principle of proportionality,in recognition of variations in technical capacities and the systemic importance of REs._ Central banks pointed to serious challenges in terms of data availability,modelling risks,and varied capacities of REs.In this context,current policy efforts aim at enhancing RE

6、 capabilities to manage physical climate risks,rather than modifying capital requirements._ The Reserve Bank of India(RBI)has taken critical steps to raise awareness among REs on climate issues,and it is important not to lose this momentum.This paper offers a stylised roadmap based on a phased appro