April 1, 2022

FDIC requests public comment on draft principles related to climate-related financial risks for large financial institutions

On March 30, 2022, the US Federal Deposit Insurance Corporation (FDIC) requested public comment on its Statement of Principles for Climate-Related Financial Risk Management for Large Financial Institutions, that was intended to provide guidance to financial institutions with more than $100 billion in total consolidated assets on ways to safely manage exposures to climate-related financial risks and how to incorporate the safeguards into their risk management frameworks. In recent months, financial institutions have been encouraged to develop a plan to address both the physical risks (harm to people property from hurricanes, floods another other extreme weather shifts) and transition risks (stresses arising from policy changes or technological advances to address changes in climate) associated with climate change to enable these institutions to meet their obligations in the midst of natural disasters and, in the process, protect the broader financial system. While all financial institutions face material exposures to climate-related financial risks, this notice was developed specifically with large financial institutions in mind, providing guidance on a number of topics such as governance, strategic planning, scenario analysis and the development of policies, procedures and limits.  

The FDIC requests that all interested parties provide their comments within 60 days after the date that the notice was published in the Federal Register.