Integrating Climate Risks into Financial Regulation: Basel III in the Context of ESG and Stranded Assets

Öz

This article provides a finance-centered review of how climate-related physical and transition risk drivers affect financial stability and interact with the Basel III regulatory framework. It distinguishes climate-related financial risk from the broader environmental, social, and governance (ESG) framework and argues that aggregate ESG measures should not be treated as direct substitutes for prudential risk indicators. Instead, climate-related risk drivers may materialize through established financial risk categories, including credit, market, liquidity, and operational risk. The study contextualizes stranded assets and assets-at-risk as transmission channels through which transition pressures may affect asset valuation, borrower creditworthiness, credit allocation, and bank resilience. Drawing on academic research and regulatory guidance, the article evaluates the roles and limitations of capital requirements, supervisory review, scenario analysis, stress testing, and climate-related disclosure in identifying and managing such vulnerabilities. The analysis suggests that climate-related financial risks should be incorporated into prudential decision-making on the basis of financial materiality and identifiable risk transmission channels rather than through the mechanical use of aggregate ESG scores or broad green-brown classifications. Climate-related and broader sustainability disclosures can support this process by improving the information available for risk identification, supervisory assessment, and market discipline. The article contributes to the literature by clarifying the conceptual boundary between ESG frameworks and climate-related financial risk and by linking climate-risk drivers, prudential mechanisms, disclosure practices, and stranded-asset implications within a common regulatory perspective.

Anahtar Kelimeler

• Climate-related financial risks
• Basel III regulation
• Stranded assets
• ESG disclosure
• Sustainable finance

İklim Risklerinin Finansal Düzenlemeye Entegrasyonu: ESG ve Atıl Varlıklar Bağlamında Basel III

Öz

Bu makale, iklimle ilişkili fiziksel ve geçiş riski sürücülerinin finansal istikrarı nasıl etkilediğini ve Basel III düzenleyici çerçevesiyle nasıl ilişkilendirilebileceğini finans merkezli bir yaklaşımla incelemektedir. Çalışmada iklimle ilişkili finansal riskler, daha geniş çevresel, sosyal ve yönetişim (ESG) çerçevesinden kavramsal olarak ayrıştırılmakta ve toplulaştırılmış ESG ölçütlerinin doğrudan ihtiyati risk göstergelerinin ikamesi olarak kullanılmaması gerektiği savunulmaktadır. Bunun yerine, iklimle ilişkili risk sürücülerinin kredi, piyasa, likidite ve operasyonel risk gibi yerleşik finansal risk kategorileri üzerinden gerçekleşebileceği kabul edilmektedir. Çalışma, atıl varlıkları ve risk altındaki varlıkları, geçiş baskılarının varlık değerlemesi, borçluların kredi değerliliği, kredi tahsisi ve bankaların dayanıklılığı üzerindeki etkilerini aktarabilen mekanizmalar olarak ele almaktadır. Akademik çalışmalar ve düzenleyici rehberler temelinde sermaye gereklilikleri, gözetim süreçleri, senaryo analizi, stres testleri ve iklimle ilişkili açıklamaların söz konusu kırılganlıkların belirlenmesi ve yönetilmesindeki rolleri ve sınırlılıkları değerlendirilmektedir. İnceleme, iklimle ilişkili finansal risklerin toplulaştırılmış ESG skorlarının veya genel yeşil-kahverengi sınıflandırmaların mekanik kullanımı yerine finansal önemlilik ve belirlenebilir risk aktarım kanalları temelinde ihtiyati karar süreçlerine dâhil edilmesi gerektiğine işaret etmektedir. İklimle ilişkili ve daha geniş sürdürülebilirlik açıklamaları ise risklerin belirlenmesi, denetimsel değerlendirme ve piyasa disiplininde kullanılabilecek bilgi setini güçlendirerek bu süreci destekleyebilir. Makale, ESG çerçeveleri ile iklimle ilişkili finansal risk arasındaki kavramsal sınırı netleştirerek iklim riski sürücülerini, ihtiyati düzenleme mekanizmalarını, açıklama uygulamalarını ve atıl varlıkların etkilerini ortak bir düzenleyici perspektifte ilişkilendirmesi bakımından literatüre katkı sağlamaktadır.

Anahtar Kelimeler

• İklimle ilişkili finansal riskler
• Basel III düzenlemesi
• Atıl varlıklar
• ESG açıklamaları
• Sürdürülebilir finans

Kaynakça

1. Adrian, T., Morsink, J., & Schumacher, L. (2020). Stress testing at the IMF (IMF Working Paper No. 20/15). Washington, DC: International Monetary Fund. Retrieved from https://www.imf.org/en/Publications/ Departmental-Papers-Policy-Papers/Issues/2020/01/31/StressTesting-at-the-IMF-48825
2. Bank for International Settlements. (2020). Climate-related financial risks: A survey of practices. Basel: BIS. Retrieved from https://www.bis.org /bcbs/ publ/d502.pdf
3. Bank of England. (2021). Key elements of the 2021 climate biennial exploratory scenario (CBES). London: Bank of England. Retrieved from https://www.bankofengland.co.uk/stress-testing/2021/keyelements-2021-biennial-exploratory-scenario-financial-risksclimate-change
4. Basel Committee on Banking Supervision. (2021). Climate-related risk drivers and their transmission channels. Basel, Switzerland: Bank for International Settlements. Retrieved from https://www.bis.org/bcbs/publ/d517.pdf
5. Basel Committee on Banking Supervision. (2022). Principles for the effective management and supervision of climate-related financial risks. Basel, Switzerland: Bank for International Settlements. Retrieved from https://www.bis.org/bcbs/publ/d532.pdf
6. Basel Committee on Banking Supervision. (2025). A framework for the voluntary disclosure of climate-related financial risks. Basel, Switzerland: Bank for International Settlements. Retrieved from https://www.bis.org/bcbs/publ/d597.pdf
7. Battiston, S., Mandel, A., & Monasterolo, I. (2017). A climate stress-test of the financial system. Nature Climate Change, 7(4), 283–288. doi:10.1038/nclimate3255
8. Battiston, S., & Monasterolo, I. (2020). The climate spread of corporate and sovereign bonds (SSRN Working Paper No. 3376218). Rochester, NY: Social Science Research Network. doi:10.2139/ssrn.3376218

9. Berg, F., Kölbel, J. F., & Rigobon, R. (2022). Aggregate confusion: The divergence of ESG ratings. Review of Finance, 26(6), 1315–1344. doi:10.1093/rof/rfac033
10. BlackRock. (2020). Sustainability as BlackRock’s new standard for investing. Harvard Law School Forum on Corporate Governance. Retrieved from https://corpgov.law.harvard.edu/2020/01/17/sustainability-asnew-standard-for-investing/
11. Bolton, P., Despres, M., Pereira da Silva, L. A., Samama, F., & Svartzman, R. (2020). The green swan: Central banking and financial stability in the age of climate change. Basel: Bank for International Settlements. Retrieved from https://www.bis.org/publ/othp31.pdf
12. Bos, K., & Gupta, J. (2019). Stranded assets and stranded resources: Implications for climate change mitigation and global sustainable development. Energy Research & Social Science, 56, 101215. doi:10.1016/j.erss.2019.05.025
13. Caldecott, B. (2018). Stranded assets and the environment: Risk, resilience and opportunity. London, UK: Routledge.
14. Caldecott, B., Harnett, E., Cojoianu, T., Kok, I., & Pfeiffer, A. (2016). Stranded assets: A climate risk challenge. Energy Policy, 92, 1–11. doi:10.18235/0012646
15. Campiglio, E., Dafermos, Y., Monnin, P., Ryan-Collins, J., Schotten, G., & Tanaka, M. (2018). Climate change challenges for central banks and financial regulators. Nature Climate Change, 8(6), 462–468. doi:10.1038/s41558-018-0175-0
16. Carney, M. (2015). Breaking the tragedy of the horizon: Climate change and financial stability (Speech at Lloyd’s of London). Retrieved from https://www.bis.org /review/r151009a.pdf
17. Chaudhary, N. (2024). From stranded assets to assets-at-risk: Reframing the narrative for European private financial institutions. Paris: I4CE. Retrieved from https://www.i4ce.org/wpcontent/uploads/2024/06/ From-Stranded-Assets-to-Assets-at-Risk.pdf
18. Chen, C., Pan, D., Huang, Z., & Bleischwitz, R. (2021). Engaging central banks in climate change? The mix of monetary and climate policy. Journal of Environmental Economics and Management, 109, 102531. doi:10.1016/j.jeem.2021.102531
19. Cochran, I., Hubert, R., Marchal, V., & Youngman, R. (2014). Public financial institutions and the low-carbon transition: Five case studies on lowcarbon infrastructure and project investment (OECD Environment
20. Working Papers No. 72). Paris: OECD Publishing. doi:10.1787/5jxt3rhpgn9t-en
21. de Bandt, O., Kuntz, L.-C., Pankratz, N., Pegoraro, F., Solheim, H., Sutton, G., ... Xia, F. D. (2025). The effects of climate change-related risks onbanks: A literature review. Journal of Economic Surveys, 39, 1553–1594. doi:10.1111/joes.12665
22. Delmas, M. A., & Burbano, V. C. (2011). The drivers of greenwashing. California Management Review, 54(1), 64–87. doi:10.1525/cmr.2011.54.1.64
23. Ehlers, T., & Packer, F. (2017). Green bond finance and certification. BIS Quarterly Review, September, 89–104. Retrieved from https://www.bis.org/publ/ qtrpdf/r_qt1709h.htm
24. Emambakhsh, T., Fuchs, M., Kördel, S., Kouratzoglou, C., Lelli, C., Pizzeghello, R., ... Spaggiari, M. (2023). The road to Paris: Stress testing the transition towards a net-zero economy: The energy transition through the lens of the second ECB economy-wide climate stress test (ECB Occasional Paper Series No. 328). Frankfurt am Main, Germany: European Central Bank. doi:10.2866/49649
25. European Banking Authority. (2023). Report on the role of environmental and social risks in the prudential framework (EBA/REP/2023/34). Paris: EBA. Retrieved from https://www.eba.europa.eu/sites/default/documents/ files/document_library/Publications/Reports/2023/Report%20on%2 0the%20role%20of%20environmental%20and%20social%20risks%2 0in%20the%20prudential%20framework.pdf
26. European Commission, Technical Expert Group on Sustainable Finance. (2020). Taxonomy: Final report of the Technical Expert Group on Sustainable Finance. Brussels: European Commission. Retrieved from https://finance.ec.europa.eu/system/files/2020-03/200309- sustainable-finance-teg-final-report-taxonomy_ en.pdf
27. European Securities and Markets Authority. (2023). The heat is on: Disclosures of climate-related matters in the financial statements (ESMA32- 1283113657-1041). Paris: ESMA. Retrieved from https://www.esma.europa.eu/sites/default/files/2023- 10/ESMA32128311 3657-1041_Report_- _Disclosures_of_Climate_Related_Matters_in_the_ Financial_Statements.pdf
28. Flammer, C. (2021). Corporate green bonds. Journal of Financial Economics, 142(2), 499–516. doi:10.1016/j.jfineco.2021.01.010
29. G20 Sustainable Finance Working Group. (2021). G20 sustainable finance roadmap. Retrieved from https://g20sfwg.org/wpcontent/uploads /2022/01/RoadMap_ Final14_12.pdf
30. Intergovernmental Panel on Climate Change. (2021). Climate change 2021: The physical science basis. Cambridge, UK: Cambridge University Press. Retrieved from https://www.ipcc.ch/report/ar6/wg1/
31. Intergovernmental Panel on Climate Change. (2022). Climate change 2022: Impacts, adaptation, and vulnerability. Cambridge, UK: Cambridge University Press. Retrieved from https://www.ipcc.ch/report/ar6/wg2/
32. International Accounting Standards Board. (2017). IFRS practice statement 2: Making materiality judgements. Retrieved from https://www.ifrs.org/ content/dam/ifrs/publications/amendments/english/2017/ifrspracti ce-statement-2-making-materiality-judgements.pdf
33. International Sustainability Standards Board. (2023). IFRS S2: Climate-related disclosures. London, England: IFRS Foundation. Retrieved from https://www.aref.org.uk/static/7fcd9bfa-a99d-4195- 975a922f2f0d938a/ISSB 2023-IFRS-S2-Climate-relateddisclosures.pdf
34. Kölbel, J. F., Heeb, F., Paetzold, F., & Busch, T. (2020). Can sustainable investing save the world? Reviewing the mechanisms of investor impact. Organization & Environment, 33(4), 554–574. doi:10.1177/1086026620919202
35. Lamperti, F., Bosetti, V., Roventini, A., Tavoni, M., & Treibich, T. (2021). Three green financial policies to address climate risks. Journal of Financial Stability, 54, 100875. doi:10.1016/j.jfs.2021.100875
36. Lenton, T. M., Rockström, J., Gaffney, O., Rahmstorf, S., Richardson, K., Steffen, W., & Schellnhuber, H. J. (2019). Climate tipping points—Too risky to bet against. Nature, 575(7784), 592–595. doi:10.1038/d41586- 019-03595-0
37. Lozano Setién, C., Merino Rueda, S., & Palomeque Pozas, E. (2024). El riesgo de cambio climático y la normativa prudencial bancaria: Iniciativas y desafíos. ICE, Revista de Economía, (936), 37–50. doi:10.32796/ice.2024.936.7832
38. Monasterolo, I. (2020). Climate change and the financial system. Annual Review of Resource Economics, 12(1), 299–320. doi:10.1146/annurevresource-110119-031134
39. Network for Greening the Financial System. (2019). A call for action: Climate change as a source of financial risk. Retrieved from https://www.ngfs.net/system/files/import/ngfs/medias/documents/ ngfs_first_comprehensive_report-17042 019_0.pdf
40. Network for Greening the Financial System. (2020a). Climate scenarios for central banks and supervisors. Retrieved from https://www.ngfs.net/sites/default/files/medias/documents/ngfs_cli mate_scenarios_for_central_banks_and_supervisors.pdf
41. Network for Greening the Financial System. (2020b). Guide for supervisors: Integrating climate-related and environmental risks into prudential supervision. Retrieved from https://www.ngfs.net/system/files/import /ngfs/medias/documents/ngfs_guide_for_supervisors.pdf
42. Network for Greening the Financial System. (2022). Enhancing market transparency in green and transition finance. Retrieved from https://www.ngfs.net/system/files/import/ngfs/medias/documents/ enhancing_market_transparency_in_green_and_transition_finance. pdf
43. Organisation for Economic Co-operation and Development. (2017). Mobilising bond markets for a low-carbon transition. Paris: OECD Publishing. doi:10.1787/9789264272323-en
44. Organisation for Economic Co-operation and Development. (2020). Developing sustainable finance definitions and taxonomies. Paris: OECD Publishing. doi:10.1787/134a2dbe-en
45. Organisation for Economic Co-operation and Development. (2021). Effective carbon rates 2021: Pricing carbon emissions through taxes and emissions trading. Paris: OECD Publishing. doi:10.1787/0e8e24f5-en
46. Palmieri, E. (2023). Bank's capital structure and risk allocation after the introduction of ESG criteria in the financial sector (Doctoral dissertation, Università degli Studi di Udine). Retrieved from https://air.uniud.it/retrieve/1e0fcbff-6f9b-4e48- afc126f6ce5bbe32/Tes i%20Palmieri.pdf
47. Schimperna, F., & Loizzo, T. (2022). ESG disclosure: Regulatory framework and challenges for Italian banks (Bank of Italy Occasional Paper No. 744). Retrieved from https://doi.org/10.2139/ssrn.4463149
48. Symon, J. (2024). Is the Basel framework up to the challenge of climate risk? Green Central Banking. Retrieved from https://greencentralbanking. com/2024/11/05/is-the-basel-framework-up-to-the-challenge-ofclimate-risk/
49. Svartzman, R., Bolton, P., Després, M., Pereira da Silva, L. A., & Samama, F. (2021). Central banks, financial stability and policy coordination in the age of climate uncertainty: A three-layered analytical and operational framework. Climate Policy, 21(4), 563–580. doi:10.1080/14693062.2020.1862743
50. Şimşek, O., & Tunalı, H. (2022). Yeşil finansman uygulamalarının sürdürülebilir kalkınma üzerindeki rolü: Türkiye projeksiyonu. Ekonomi ve Finansal Araştırmalar Dergisi, 4(1), 16–45. Retrieved from https://dergipark.org.tr/tr/ pub/jefr/issue/70978/1126380
51. Task Force on Climate-related Financial Disclosures. (2017). Final report: Recommendations of the task force on climate-related financial disclosures. Retrieved from https://assets.bbhub.io/company/sites/ 60/2021/10/FINAL-2017-TCFD-Report.pdf
52. Thivaios, P. (2024). Are we heading towards “Basel V”? Climate, cryptos and other challenges for banks. In M. Choudhry (Ed.), Professional perspectives on banking and finance (Vol. 1, pp. 97–121). Bingley, UK: Emerald Publishing. doi:10.1108/978-1-83549-334-220241008