The Monetary Authority of Singapore (MAS) has teamed up with the Bank for International Settlements’ (BIS) Innovation Hub to launch a blueprint for a climate risk platform aimed at assisting financial authorities in managing climate-related risks. Known as Project Viridis, this initiative was developed at the BIS Innovation Hub Centre in Singapore and outlines essential features and metrics for the platform.

This climate risk platform will incorporate data on financed emissions, physical risk exposure, and predictive assessments under various climate scenarios. By integrating regulatory and climate data, it aims to equip financial authorities with the tools to identify, monitor, and manage climate risks within the financial system.

According to MAS and BIS Innovation Hub, the blueprint seeks to address challenges in incorporating climate risk analysis into financial stability monitoring. These challenges stem from the complexities of climate change, significant data gaps, and a limited understanding of how to effectively measure associated risks.

Project Viridis illustrates how regulatory data can be combined with climate information, sourced from corporate disclosure documents through natural language processing techniques. This integration provides regulators with insights into climate-related financial risks, enabling them to assess financial institutions’ risk exposures and pinpoint areas necessitating deeper evaluations.

Celine Sia, Assistant Managing Director for Economics and Knowledge Management at MAS, emphasized that the blueprint enhances regulators’ ability to evaluate both physical and transition climate risks within individual banks and the broader financial system. She expressed optimism for further collaboration to expand these vital analytical tools, noting the project’s relevance to global financial authorities facing similar challenges.