WASHINGTON— The Federal Deposit Insurance Corporation said it is now requesting public comment on draft principles that would provide a “high-level framework for the safe and sound management of exposures to climate-related financial risks.”
The announcement comes less than a month after NCUA board members stressed that the agency’s new strategic plan through 2026 mentions climate change but does not mandate any actions on the part of credit unions.
“Although all financial institutions, regardless of size, may have material exposures to climate-related financial risks, these draft principles are intended for the largest financial institutions, those with over $100 billion in total consolidated assets,” the FDIC said. “The draft principles were developed to support efforts underway by large financial institutions to consider key aspects of climate-related financial risk management.”
Addressing ‘Weaknesses’
According to the FDIC, weaknesses in how financial institutions identify, measure, monitor, and control the financial risks associated with a changing climate could adversely affect a financial institution’s safety and soundness, as well as the overall financial system.
“The draft principles will help financial institution management make progress toward addressing key questions as they consider incorporating climate-related financial risks into their institutions’ risk management frameworks,” the FDIC added.
The FDIC said it is encouraging financial institutions to consider climate-related financial risks in a manner that allows them to continue to prudently meet the financial services needs of their communities.
The comment period will run for 60 days.