On February 6, 2023, the Center for American Progress submitted comments to the Federal Reserve Board regarding the board’s proposed climate-related risk management principles for the largest banks (those with more than $100 billion in total assets). The principles set forth a high-level framework to help firms manage exposure to climate-related financial risks, including governance; policies, procedures, and limits; strategic planning; risk management; data, risk measurement, and reporting; and scenario analysis. These principles are largely consistent with what has been proposed by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. in December 2021 and March 2022, respectively. CAP commends the Fed and fellow banking regulators in proposing these principles and makes recommendations on how this guidance can be strengthened to help address the evolving nature of climate-related financial risks on banks and the broader U.S. financial system.
Click here to read CAP’s comment letter.