The Bank of International Settlements (BIS) and the Monetary Authority of Singapore (MAS) recently created a blueprint for a new platform. The platform’s purpose is to integrate regulatory and climate data, which will assist financial authorities in identifying, managing, and monitoring climate risks throughout the financial sector.

What Is Project Viridis?

The newly developed blueprint is named Project Viridis, and it lays out some of the key metrics and features needed to build a reliable and accurate climate risk platform.

The platform will accumulate information and data on a variety of aspects, including financed emissions, physical risk exposure, as well as forward-looking assessments under various climate scenarios.

Commenting on the blueprint, the MAS’ assistant managing director, Celine Sia, said that Project Viridis can show how regulatory data can be integrated with climate data. This data is typically extracted from corporate disclosure documents via natural language processing techniques.

Sia added that doing so can provide authorities with valuable insight into climate-related financial risks. Furthermore, it can also help them form a view of what kinds of risk exposures a specific financial institution is dealing with. More than that, it can even help identify areas where a more in-depth risk assessment may be required.

This approach will save a lot of time as it will show authorities exactly which areas they need to pay closer attention to, instead of having them comb through all of the data and systems on their own.

The Viridis platform, which can now be built thanks to the blueprint, uses the Ellipse Data and Knowledge Platform (EDKP) as its foundational architecture. This was developed by the BIS Innovation Hub Singapore Centre in collaboration with MAS under Project Elipse.

Financial Entities Collaborating For The Greater Good

Thanks to EDKP, the Viridis platform can enable the integration of structured and unstructured data retrieved from various sources. Meanwhile, more than 15 central banks and financial regulators from various corners of the world will also be feeding it fresh data. In other words, it will be a well-rounded, all-encompassing system that will likely become the main data hub for climate risk information in the finance sector.

The Viridis platform was initially announced in 2022, and it was born out of a need for adaptive and forward-thinking strategies regarding the impact of climate change on the global financial landscape. However, this was not the first time that BIS and MAS have worked together on a project.

Previously, the two joined forces with other financial institutions during the development of Project Mariana, which launched in 2022. Back then, BIS and MAS helped with the testing of international settlement capabilities of wholesale CBDCs across three major global markets.