Rescission of Principles for Climate-Related Financial Risk Management for Large Financial Institutions

Summary:

The Federal Deposit Insurance Corporation, Board of Governors of the Federal Reserve System, and Office of the Comptroller of the Currency (collectively, “agencies”) are jointly rescinding interagency Principles for Climate-Related Financial Risk Management for Large Financial Institutions (“principles”). 

Statement of Applicability: The contents of, and material referenced in, this FIL are intended for the largest financial institutions, those with over $100 billion in total assets. 

Highlights:

• On October 30, 2023, the agencies issued the principles, which were intended for financial institutions with over $100 billion in total consolidated assets.
• The agencies’ existing safety and soundness standards require all supervised institutions to have effective risk management processes commensurate with the size, complexity, and risk of their activities.
• In addition, all supervised institutions are expected to consider and appropriately address all material risks in their operating environment and should be resilient to a range of risks, including emerging risks.
• The agencies do not believe principles for the management of climate-related financial risk are necessary and are concerned that such principles could distract from the management of other potential risks identified and addressed by financial institutions’ existing risk management processes and the agencies’ other risk management rules and guidance.
• The attached Federal Register notice rescinds the interagency principles effective immediately.