Central banks turn to AI for analyzing climate hazards

Central banks have begun utilizing artificial intelligence to gather data for evaluating climate-related financial risks, a move prompted by the anticipated increase in disclosures from banks and other entities. The Gaia AI project, an initiative by the Bank for International Settlements along with other major central banks, analyzes company disclosures on carbon emissions, green bond issuances, and net-zero commitments.

This tool overcomes the challenge of diverse reporting standards, offering a clearer view of climate-related financial risks by focusing on the definitions of indicators rather than their labels, making the addition of new performance indicators and institutions more streamlined. This innovation could potentially lead to Gaia being made publicly available, enhancing transparency in climate risk analysis​ — Reuters

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