OCC solicits feedback on recently released climate-related risk principles

Bank Regulatory Agency Rule-Making & Guidance OCC Climate-Related Financial Risks

On December 16, the OCC announced draft principles intended to support the identification and management of climate-related financial risks at OCC-regulated institutions with over $100 billion in total consolidated assets. (See also OCC Bulletin 2021-62.) The principles address, among other things: (i) governance; (ii) polices, procedures and limits; (iii) strategic planning; (iv) risk management; (v) data, risk measurement, and reporting; and (vi) scenario analysis. According to the OCC, the principles are meant to support banks’ efforts to focus on key aspects of climate-related financial risk management and to provide a high-level framework for climate-related financial risk management consistent with existing OCC rules and guidance. The OCC also noted that though all banks, regardless of size, could potentially experience material exposures to climate-related financial risks, the principles are targeted at the largest banks. According to the announcement, the OCC intends “to elaborate on these principles in subsequent guidance that would distinguish roles and responsibilities of boards and management, incorporate the feedback received on the principles, and consider lessons learned and best practices from the industry and other jurisdictions.” Comments are due by February 14, 2022.