The Treatment of Physical Climate Risks by Central Banks - Insights for the Reserve Bank of India

This paper outlines the initiatives taken by central banks and financial authorities to address climate risk within the financial sector. It highlights the efforts of the Reserve Bank of India (RBI) to engage with regulated entities (REs) on climate risk assessment and disclosure. Drawing on interviews with central banks and literature reviews, the paper discusses challenges such as lack of technical skills, data limitations, and assumptions in climate modelling.