On June 2, 2022, the US Commodity Futures Trading Commission (“CFTC”) released a request for information on how climate-related financial risk is related to the derivatives markets and underlying commodities markets (the “RFI”). The RFI is intended to inform the CFTC’s next steps in this rapidly developing area and respond to the 2021 Report on Climate-Related
SEC Proposes Climate Change Disclosure Rules Applicable to Public Companies
On March 21, 2022, the U.S. Securities and Exchange Commission (SEC) voted 3:1, with only Commissioner Hester Peirce dissenting, to propose long-awaited rules that, if adopted, would require extensive reporting by public companies of climate change-related disclosure and related attestation (the “Proposal”). Comments on the Proposal are due 30 days after
Climate-Related Risk Management Principles Released by US Banking Regulator
On December 16, 2021, the US Office of the Comptroller of the Currency (OCC) released draft principles for managing exposures to climate-related financial risks (Climate Principles). The OCC regulates national banks, federal savings associations, and federal branches and agencies of foreign banking organizations.
The Climate Principles are targeted at banks with
Initial Climate Change Risk Management Expectations Issued by US OCC
On November 8, 2021, the acting head of the Office of the Comptroller of the Currency (OCC), Michael J. Hsu, issued a call to action on climate change to the boards of directors of OCC-regulated banks. Specifically, he outlined an initial series of climate change-related questions that boards should be asking bank management
US FSOC Report: Climate-Related Financial Risk an Emerging Threat
On October 21, 2021, the United States Financial Stability Oversight Council (FSOC) released its 133-page report on Climate-Related Financial Risk (Report) and related Factsheet. The Report discusses how climate-related financial risks can implicate financial stability and declares climate-related finance risk as an emerging threat to financial stability. In a new
BCBS Issues Two Climate-Related Reports Highlighting Work Remaining
On April 14, 2021, the Basel Committee on Banking Supervision (BCBS) issued two climate-related reports—one on climate-related risk drivers and their transmission channels and a companion report on measurement methodologies for financial risks. Among the reports’ findings:
- Banks and the banking system are exposed to climate change through macro- and microeconomic transmission
US Federal Reserve Joins the Network for the Greening of the Financial System
Following a unanimous vote on December 7, 2020, the United States Board of Governors of the Federal Reserve System (Board) announced on December 15, 2020, that it has joined the Network of Central Banks and Supervisors for the Greening of the Financial System (Network or NGFS) as a member and, by so doing, joins 83 other members and 13 observers. While the Board had attended NGFS meetings in the past, it was the only major central bank (other than the Reserve Bank of India) to not be a member.
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