Federal Reserve Proposes Plan to Address Climate Risks for Banks

On December 2, the Federal Reserve Board (Fed) proposed new principles for how banking institutions should manage climate-related financial risks. The proposed principles would apply to banking organizations with more than $100 billion in total assets and are aimed at tackling both the physical risks and transition risks associated with climate change. The Fed intends to coordinate with the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), which proposed their own plans to address climate risks earlier this year, before issuing any final guidance. Public comments are due by February 6, 2023.

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