The US Office of the Comptroller of the Currency (OCC) is seeking public and industry feedback on draft principles to guide US banks in identifying and managing their climate-related financial risks. Released last week, the guidelines will apply only to institutions with more than $100bn in total assets and will be open for consultation until February 14 2022.
The OCC is an independent bureau within the US Treasury and is responsible for regulating and supervising all federally licensed banks operating in the country. It is the primary prudential regulator of approximately 70% of assets in the US commercial banking system.
Largely aligned with the recommendations of the Taskforce on Climate-related Financial Disclosures, the draft guidelines describe how climate-related financial risks can be addressed in various risk categories, including credit, liquidity, operational and legal risk. They are accompanied by a series of 13 specific questions on which the OCC is seeking feedback.
“Today’s release takes an important, concrete step towards ensuring the safety and soundness of large banks in the face of increasing risks from climate change,” said acting comptroller of the currency Michael J Hsu. “We look forward to the feedback and to working with our interagency peers to develop more detailed guidance next year.”
The OCC has been slower than its European and Asian peers in responding to the systemic challenges faced by the US banking system as a result of the climate emergency. The regulator joined the Network for Greening the Financial System in August, shortly after the appointment of its first climate change risk officer.
The publication of the draft principles comes just days after the release of a major report from leading climate groups showing that the 18 largest banks and asset managers in the US were responsible for financing the equivalent of 1.9bn tons of CO₂ in 2020, more than the entire economies of Brazil or Japan.
This page was last updated December 20, 2021
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