| Type of Regulated Entity | Applicability | |
|---|---|---|
| Column 1 | Column 2 | |
| All Scheduled Commercial Banks (excluding Local Area Banks, Payments Banks, and Regional Rural Banks) | ||
| All Tier-IV Primary (Urban) Co-operative Banks (UCBs) | ||
| All All-India Financial Institutions (viz. EXIM Bank, NABARD, NaBFID, NHB and SIDBI) | ||
| All Top and Upper Layer Non-Banking Financial Companies (NBFCs) | ||
For other entities, adoption of the Disclosure Framework may be voluntary initially.
Disclosures under the framework should be made on a standalone basis and form part of the financial statements/results published on the entity's website. Boards of directors or relevant committees are responsible for reviewing these disclosures.
Details governance processes, controls, and procedures for managing climate-related financial risks and opportunities. Key disclosures include governance structure, roles and responsibilities, and consideration of climate-related issues in decision-making.
Describes the entity's strategy for managing climate-related risks and opportunities, including their potential impact on business prospects and the business model. Enhanced disclosures cover effects on financial position and performance, adaptation/mitigation efforts, and climate scenario analysis.
Outlines processes to identify, assess, prioritize, and monitor climate-related risks and their integration into overall risk management. Key disclosures include methodologies for assessing risks and their incorporation into internal control frameworks.
Details performance concerning climate-related risks and opportunities, including progress towards set targets. Enhanced disclosures cover GHG emissions, asset vulnerability, and integration of climate considerations into remuneration policies.
Entities need to take various actions to ensure compliance and positive reporting:
1
Adopting a climate-related risk management policy
2
Setting metrics and targets for climate-related performance
3
Modifying internal capital and liquidity adequacy assessment processes
4
Including climate-related considerations in remuneration policies
Overall, the regulated entities need to ensure that consideration of climate-related issues is imbibed in the overall organizational policies of the entity. The Disclosure Framework is a step towards bringing the climate risk reporting requirements under mainstream compliance framework, for financial sector entities in India. Currently, the only form of mandatory disclosure requirement concerning non financial reporting is through the Business Responsibility and Sustainability Report (BRSR), which is required to be given by the top 1000 listed entities based on market capitalization.
