On December 17, 2021, the Office of the Comptroller of the Currency (OCC) and its Acting Comptroller of the Currency Michael J. Hsu released a statement in support of the Financial Stability Oversight Council’s (FSOC) decision to create a new Climate-related Financial Risk Committee (CFRC). According to its Report on Climate-Related Financial Risk, the FSOC, which seeks to address vulnerabilities in the US financial system, views climate-related financial risks as an emerging threat to the financial stability of the US and, in response, formed the CFRC to identify priority areas for assessing and mitigating climate-related risks to the financial system; coordinate the sharing of climate-related information; facilitate the development of common approaches and standards of addressing these risks; and foster communication among FSOC members and other interested parties. The new committee is expected to provide status updates to the FSOC on at least a semi-annual basis – updates that the FSOC will summarize and share in its Annual Report.
In his statement, Hsu also discussed the draft principles that were issued by the OCC on December 16, 2021 to support the identification and management of climate-related financial risks for large banks. The draft principles are intended to address climate-related risks faced by OCC-regulated institutions with more than $100 billion in total consolidated assets. Interested parties are able to provide feedback on the draft principles through February 14, 2022 that the OCC will use to develop more detailed guidance in the coming year.