Fed releases climate risk management proposals for big banks

Read the full story at ESG Today.

The U.S. Federal Reserve Board released a series of proposed principles for large banks with over $100 billion in assets to mange and monitor climate-related risk.

The proposals are aimed at supporting banks’ efforts to incorporate climate-related financial risks into their broader risk management frameworks, and at providing a framework for managing exposure to these risks consistent with the Fed’s existing rules and guidance.

In the introduction to the proposals, the Board notes that the guidance comes as “the financial impacts that result from the economic effects of climate change and the transition to a lower carbon economy pose an emerging risk to the safety and soundness of financial institutions and the financial stability of the United States.”