Climate and Nature Financial Risk
The Global Risks Alliance (GRA)
Climate and nature disclosure gives investors, lenders and supervisors information on exposure and management. ISSB IFRS S2 sets a global baseline adopted in many jurisdictions; the Basel Committee has a voluntary bank framework; the TNFD addresses nature. Underneath sit data on emissions, exposures and locations that are often estimated. This page sets out how disclosure and data work, where they fall short, and who decides.
GRA · In development · service level R0
Climate disclosure and data are the reporting standards and underlying information that show financial institutions' climate and nature exposure. IFRS S2 is the global baseline; the Basel framework is voluntary for banks; counterparty and location data are often estimated. Regulators, supervisors and audit committees hold the decisions.
Where a portfolio's assets sit, and how much of its value is most exposed. Hypothetical assets, not an assessment.
Source quality and comparability. The dossier below sets out how the risk develops, what is measured, where the data come from, how it is modelled and who decides.
IFRS S2 requires governance, strategy, risk management, metrics and targets disclosures, with industry-specific metrics and financed emissions for financial institutions. Jurisdictions adopt with reliefs and timelines.
Financial institutions depend on borrowers' and investees' data, which many do not report. Estimates fill gaps, with quality scores that must be disclosed.
Physical and nature risk need asset locations, which are often absent from loan and investment records. Without them, exposure is guessed.
Sustainability data receive less assurance than financial statements. Errors in estimates and methods can persist into decisions.
Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.
| Term | Definition |
|---|---|
| Data quality score | A PCAF score from one to five describing the reliability of data used for financed emissions. |
| Geolocation | Recording the geographic coordinates of an asset or collateral so it can be linked to hazards. |
| Pillar 3 | The Basel framework's disclosure requirements, designed to support market discipline. |
Each indicator carries its unit, its cadence, the kind of source behind it and the evidence label a value would carry. No values are shown: a programme supplies them under its own authority.
| Indicator | Unit | Cadence | Source type | Label |
|---|---|---|---|---|
| Jurisdictions adopting ISSB standards | count by approach | on change | IFRS Foundation jurisdictional profiles | OFFICIAL |
| Financial institutions disclosing financed emissions | count | annual | PCAF and disclosure records | DECLARED |
| PCAF data quality score | score, one to five | annual | Institution disclosures | DECLARED |
| Share of counterparties with reported emissions | percent | annual | Institution data | REPORTED |
| Exposures with geolocated collateral | share of portfolio | periodic | Bank data | REPORTED |
| Sustainability disclosures with external assurance | share of reports | annual | Company filings | DECLARED |
The topic as a computational graph: named sources feed the methods, an evidence review gates the outputs, and the decisions stay with the authorities that hold them.
Fig. 02Nodes carry their type, two metric rows and a state; connectors show what feeds what; dashed frames name the owners; the timeline is the cadence. Design of the pipeline, not a record of a run.
Named public datasets and institutional records, each with its licence class. Sources by agreement are used only under their terms and never republished.
| Source | What it gives | Licence class |
|---|---|---|
| IFRS Foundation jurisdictional profiles | Adoption of ISSB standards by jurisdiction | Free to read, IFRS Foundation terms |
| BCBS disclosure of climate-related financial risks framework | Voluntary bank disclosure templates | Free, BIS terms |
| PCAF standard and signatory list | Financed emissions methods and adopters | Free to read, PCAF terms |
| NZDPU (Net-Zero Data Public Utility) | Company emissions and targets data | Free, terms to check |
| CDP disclosure data | Self-reported climate, water and forest data | Proprietary; summary results free to read |
Climate and Nature Financial Risk prepares evidence. The decisions below are taken by the authorities named, under their own rules, and never by the platform.
| Who decides | The question | Evidence this page serves |
|---|---|---|
| Securities regulators and finance ministries | Whether and how to adopt ISSB standards | Jurisdictional comparisons |
| Prudential supervisors | Whether to require the Basel climate disclosure framework | Framework content and peer adoption |
| Bank and insurer audit committees | How climate data are governed and assured | Data quality and assurance practice |
| Data providers and users | Which data to collect and estimate | Coverage and quality evidence |
Disclosure frameworks, such as the standards of the International Sustainability Standards Board, the recommendations of the Task Force on Climate-related Financial Disclosures and the framework of the Taskforce on Nature-related Financial Disclosures, have improved consistency. But coverage is uneven, especially for smaller and private companies, and value-chain emissions are often estimated.
Where data are missing, providers estimate them using models, and different providers' estimates can differ substantially. Without clear labelling, estimated data can be mistaken for reported data, giving false precision.
Distinguishing reported, estimated and modelled values. Labelling is inconsistent across providers.
Assessing consistency of definitions, scope and boundaries.
Understanding how missing data are estimated, using financial economics and macro-finance. Methods are often proprietary.
Assessing asset location data, with spatial statistics and geostatistics. See Model and measurement gaps.
The current service level is R0: information and enquiries. An enquiry receives a reference and names the next step; applications, payments, compute allocations and registrations open only when their team, terms and review capacity exist.