The US Office of the Comptroller of the Currency (OCC) has joined the Network for Greening the Financial System (NGFS) and has appointed its first ‘Climate Change Risk Officer’ as it belatedly responds to the systemic challenges posed by the climate emergency. Darrin Benhart, a 30-year veteran of the agency who previously served as chair of the OCC’s National Risk Committee, will lead efforts to prepare US banks to manage their climate-related financial risks.
An independent bureau within the US Department of the Treasury, the OCC charters, regulates, and supervises all federally licensed banks operating in the United States, acting as the primary prudential regulator of approximately 70% of the assets in the U.S. commercial banking system.
Announcing the measures on Tuesday, Acting Comptroller of the Currency Michael J. Hsu said that they will “enable the agency to be more proactive in accelerating the development and adoption of robust climate change risk management practices, especially at the larger banks.” The agency will take a two-pronged approach to act on climate change, he said, engaging and learning from others and “supporting the adoption of effective climate risk management practices at banks.”
Yevgeny Shrago, Policy Counsel for Public Citizen’s Climate Program welcomed the announcements, but warned that the measures were only preliminaries. “The OCC must take heed of what other NGFS members are finding – that banks aren’t ready to deal with climate risk, even as the dangers of the climate crisis to the financial system become ever more apparent,” Shrago said, calling for the agency to “lay out its plan to move from laggard to leader on climate risk” in an upcoming Treasury report outlined in President Biden’s recent Executive Order on Climate-Related Financial Risk.
“This plan must include issuing robust supervisory guidance on climate change, developing climate capital requirements to keep bank’s resilient, and implementing climate risk concentration limits to help guide banks through the coming clean energy transition,” Shrago said.
The OCC joins the Federal Reserve and the Department of Financial Services of the State of New York as US members of the NGFS.
This page was last updated August 3, 2021
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