WASHINGTON, D.C. – The Federal Reserve Board of Governors today released its draft Principles for Climate-Related Financial Risk Management for Large Financial Institutions. The document, approved 6-1 by the Board, would provide guidance for financial institutions aimed at guarding against financial risk posed by the climate crisis.
David Arkush, director of Public Citizen’s Climate Program, issued the following statement
“The Fed has finally stopped dragging its feet and joined the other federal banking regulators in issuing draft guidance on climate risk management. This process has taken too long, and we are disappointed that the agency is delaying implementation of these principles to seek another round of comment. Banking regulators must take swift action to protect the stability of banks, our financial system, and our economy from the risks associated with climate change.
“The climate-related risks large banks face have only grown more severe since the OCC issued its draft principles almost a year ago. Worsening natural disasters like Hurricane Ian have caused both physical and economic harms to borrowers and economies that banks rely on to operate. Meanwhile, the passage of the Inflation Reduction Act is expected to accelerate the clean energy transition dramatically, increasing the risk of writedowns and fire sales for banks that continue to recklessly fund high emission assets and borrowers. Regulators must issue guidance that addresses the growing threats to both individual banks and the stability of the entire financial system.”
“There is no time for the Fed or other banking regulators to delay finalizing these rules. This is now the third round of comment on substantially similar, uncontroversial principles. We urge the OCC and the FDIC to finalize their own principles immediately, and for the Fed to join them shortly after this new comment period closes.”
- Climate Roadmap for U.S. Financial Regulation
- Looking over the Horizon: The Case for Prioritizing Climate-Related Risk Supervision of Banks
- Unsafe At Any Charge: Why Financial Regulators Should Actively Mitigate Climate-Related Risk
- October 11, 2022 Groups Call on Federal Reserve to Issue Climate-Related Risk Guidelines for Banks
- March 30, 2022 New FDIC Climate Rules Aim to Mitigate Climate Risk for Big Banks
- December 16, 2021 OCC Issues First Federal Climate Guidance for Banks
- September 1, 2022 Trickle-down climate risk regulation