We’re saved! ‘Large U.S. banks would have to integrate climate financial risk assessments into every aspect of their work’

Read the Full Article

WASHINGTON (Reuters) – Large U.S. banks would have to integrate climate financial risk assessments into every aspect of their work under sweeping new draft supervisory guidance proposed by a top U.S. banking regulator on Thursday.

The Office of the Comptroller of the Currency (OCC) said it was soliciting feedback on draft principles for bank supervisors assessing that risk at lenders with over $100 billion in assets with a view to developing formal guidance.

The principles touch on everything from how climate change affects board room governance, liquidity, credit and operational risk, to the way banks project hypothetical future losses on their books and their ability to service poorer communities.

The OCC’s ambitious proposal marks the most significant step yet by regulators under President Joe Biden’s administration to push banks to address climate risks. While the country’s largest lenders have been tackling climate risks for some time, the draft marks the first time supervisors would expect such work as prudent risk management, which could cause major headaches for many banks.