On 13 June 2025, the Basel Committee on Banking Supervision (BCBS) published its finalised framework for the voluntary disclosure of climate-related financial risks. The framework sets out a structured set of tables and templates designed to help banks communicate their exposure to both transition and physical climate risks. Although voluntary at the international level, jurisdictions may choose to adopt it as part of their domestic supervisory regimes.
This article provides a clear overview of the framework, its structure, and the key changes introduced since the 2023 consultation. It is the first in a three-part series covering the Basel climate disclosure framework. The second article examines the specific disclosure templates in detail, and the third article addresses practical implementation, data challenges, and alignment with existing regulatory frameworks.
Background and Timeline
The framework is the result of a multi-year process within the Basel Committee to explore how climate-related financial risk disclosures could be integrated into prudential banking supervision. The Committee initially proposed a Pillar 3 disclosure framework in late 2023, inviting industry feedback on the design, scope, and granularity of the proposed requirements.
The shift from a mandatory Pillar 3 instrument to a voluntary framework is one of the most significant outcomes of the consultation process. Regulatory divergence across jurisdictions — particularly between the EU, which already embeds climate risk disclosures into its CSRD and CRR III framework, and the United States, where political pressure has slowed climate-related regulation — made consensus on mandatory adoption difficult to achieve.
Why This Framework Matters
Even as a voluntary instrument, the Basel climate disclosure framework carries weight for several reasons. It establishes a globally recognisable template structure that banks can use to disclose climate-related financial risks in a consistent, comparable format. For financial institutions operating across borders, this consistency is important. It reduces the friction of reporting under multiple regimes and provides a reference point for supervisors evaluating climate risk management practices.
The framework also signals the direction of travel. The Committee has stated that it will monitor developments, including adoption of other frameworks and bank disclosure practices globally, and may consider revisions in the future. For banks and their data management teams, early alignment with these templates is a way to stay ahead of potential mandatory requirements.
Key Changes from the 2023 Consultation
The final framework introduces several material changes compared to the original 2023 proposal. These reflect both the feedback received during consultation and the political context surrounding climate-related financial regulation.
Framework Structure: Tables and Templates
The framework comprises two qualitative tables and four quantitative templates. Together, they cover governance, strategy, risk management, and metrics related to climate-related financial risks. Each element is designed to be disclosed annually, with flexibility in format for qualitative disclosures and fixed column structures for quantitative templates.
Table CRFRA — Governance, Strategy and Risk Management
Describes the governance processes, controls and procedures used to monitor, manage and oversee material climate-related financial risks, including how these risks affect the bank’s business model, strategy and decision-making.
Table CRFRB — Transition, Physical and Concentration Risk
Details the methodology used to determine which exposures are subject to material transition risk, physical risk, and concentration risk.
Template CRFR1 — Transition Risk: Exposures and Financed Emissions
Overview of gross carrying values by sector, together with financed emissions (Scope 1, 2, 3), credit quality, maturity profiles and off-balance sheet items.
Template CRFR2 — Physical Risk: Exposures by Geography
Gross carrying values subject to climate-related physical risks (chronic and acute events), split by geographical region as determined by national supervisors.
Template CRFR3 — Real Estate by Energy Efficiency Level
Mortgage portfolio broken down by energy efficiency of underlying collateral, measured in kWh/m² across six efficiency bands.
Template CRFR4 — Emission Intensity per Physical Output
Financed GHG emission intensity per physical output for sectors where the bank has set targets, with point-in-time distance to target calculations.
Sectoral and Geographical Classification
One of the more prescriptive aspects of the framework is its approach to classification. Banks are expected to classify exposures using the Global Industry Classification Standard (GICS) where it is already in use within the institution. Where GICS is not used, banks may rely on an alternative industry classification system used for climate-related or financial reporting, but must explain the basis for their choice.
Templates CRFR1 and CRFR4 are built around the 18 sectors defined by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD). These sectors are themselves based on GICS and include energy, transportation, materials, agriculture, and other high-emission industries. The geographical classification for physical risk is left to national supervisors to determine at the jurisdictional level.
Relationship to Other Frameworks
The Basel framework does not operate in isolation. It sits alongside a growing set of climate-related disclosure requirements that banks may already be subject to, depending on their jurisdiction. Understanding how it relates to these frameworks is critical for avoiding duplication and ensuring coherent reporting.
| Framework | Scope | Status | Key overlap with Basel |
|---|---|---|---|
| ISSB (IFRS S2) | All entities; investor-focused | Mandatory in adopting jurisdictions | Governance, strategy, metrics — Basel adds bank-specific granularity |
| CSRD / ESRS E1 | EU large companies and listed SMEs | Mandatory (phased roll-out) | Double materiality, transition plans, Scope 1–3 emissions |
| CRR III (EU Pillar 3) | EU credit institutions | Mandatory from Jan 2025 | ESG risk disclosures, GAR, fossil fuel exposures |
| TCFD | Broad; cross-sector | Sunset; absorbed into ISSB | Basel uses TCFD 18-sector classification and four-pillar structure |
For banks operating within the EU, much of the ground covered by the Basel framework is already addressed through CRR III and ESRS requirements. Institutions in jurisdictions where ISSB adoption is underway — including the UK, Switzerland, and parts of Asia — may find the Basel templates a useful complement, particularly for bank-specific metrics such as financed emissions by sector and real estate energy efficiency breakdowns.
Who Is Affected
The framework is primarily designed for internationally active banks, although jurisdictions may choose to apply it more broadly. In practice, the institutions most directly affected are those that already report under Pillar 3, including global systemically important banks (G-SIBs) and other large banking groups.
However, the templates also have implications for asset managers, insurers, and corporate borrowers who supply data to banks. Financed emissions disclosures under Template CRFR1, for example, require banks to report Scope 1, 2, and 3 emissions of their counterparties, which places data collection demands on the wider value chain. Institutions looking to streamline this process should consider how their data collection and questionnaire tools can support structured reporting across counterparties.
What Comes Next
The Committee has stated it will continue to monitor implementation across jurisdictions and may revisit the framework in future. For banks, the practical question is not whether to prepare, but how quickly to build the data infrastructure, governance processes, and reporting workflows needed to produce these disclosures consistently and at scale.
The next article in this series examines each of the six tables and templates in detail, explaining what banks are expected to disclose, how data should be classified, and where the main implementation challenges lie.
Frequently Asked Questions
Is the Basel climate disclosure framework mandatory?
No. The framework is voluntary at the international level. It becomes mandatory only if a national supervisor in a specific jurisdiction decides to implement it domestically. Individual jurisdictions retain full discretion over adoption and scope.
How does this framework differ from ISSB and CSRD requirements?
The Basel framework is specifically designed for banks and includes banking-specific templates for financed emissions, real estate energy efficiency, and sectoral transition risk exposures. ISSB (IFRS S2) and CSRD/ESRS cover broader corporate sustainability disclosures. The Basel templates complement these frameworks rather than replacing them.
What sectors are covered in the disclosure templates?
The framework uses the 18 sectors defined by the TCFD, which are based on the Global Industry Classification Standard (GICS). These include energy, transportation, materials, agriculture, and other high-emission industries. Banks must disclose material sectors and may provide additional disaggregation where relevant.
When should banks start preparing for these disclosures?
Banks should begin building the necessary data infrastructure, governance processes, and reporting workflows now. Even where adoption is not yet mandatory, early preparation reduces the risk of last-minute compliance pressure and helps institutions identify data gaps, particularly for counterparty emissions and energy efficiency metrics.
