Compliance Briefing — December 7, 2023

Executive briefing: On December 7, 2023, the Basel Committee on Banking Supervision issued its Pillar 3 disclosure framework for climate-related financial risks. The standard sets mandatory qualitative and quantitative disclosures for internationally active banks, with implementation expected starting 1 January 2026.

Immediate compliance priorities

Gap analysis. Compare existing climate disclosures to the Basel templates covering governance, strategy, risk management, metrics, and targets.
Data sourcing. Identify data owners and systems needed to report financed emissions, transition risk exposures, and scenario analyses.
Timeline planning. Establish project plans aligning Basel disclosure requirements with local supervisory expectations and ISSB-aligned reporting.

Control alignment

Governance. Ensure board oversight and management committees integrate climate risk reporting into capital planning and ICAAP processes.
Risk management. Embed climate risk appetites, limits, and monitoring into credit, market, and operational risk frameworks.
Internal control. Enhance assurance over climate data, including validation, audit trails, and model governance for scenario analysis.

Enablement moves

Develop Basel-aligned reporting templates and technology workflows for consolidated and subsidiary-level disclosures.
Coordinate with finance and sustainability teams to harmonise climate metrics across regulatory, investor, and voluntary reporting.
Engage supervisors to clarify proportionality options, especially for smaller internationally active banks.

Sources

Zeph Tech works with global banks to align climate risk governance, data pipelines, and assurance workflows to the Basel Pillar 3 disclosure standard.