The Federal Reserve’s Proposed Principles for Climate-Related Financial Risk Management for Large Institutions: Four Things To Know

On December 2, 2022, the Federal Reserve Board (“Federal Reserve”), in a 6-1 vote with support from all of the Federal Reserve Governors except Governor Waller, released and requested comments on draft principles that would provide a high-level framework for the safe and sound management of exposures related to climate-related financial risks (the “Proposal”). Comments are due February 6, 2023.

The Proposal would apply to financial institutions supervised by the Federal Reserve—including state member banks, bank holding companies, savings and loan holding companies, and foreign banking organizations with respect to their U.S. operations—with over $100 billion in assets.