Brazil's banks to incorporate climate change risks into stress tests
SAO PAULO (Reuters) - Brazil’s central bank announced on Wednesday new rules making it mandatory for banks to incorporate climate change-related risks into stress tests, starting in July 2022.
Central bank director Otavio Damaso said the new regulation aims to avoid potential financial instability stemming from climate-related risks.
The regulator also made it mandatory for banks to disclose climate-related information as part of financial reporting by July 2022, in accordance with the Task Force on Climate-Related Financial Disclosures (TCFD), set up by the G20’s Financial Stability Board guidelines.
With these moves Brazil’s central bank joins the ranks of other financial regulators demanding climate-related action from banks.
Reporting by Carolina Mandl. Editing by Jane Merriman