On February 6, ISDA and the Securities Industry and Financial Markets Association (SIFMA) submitted a joint response to the Federal Reserve Board (FRB) on the Principles for Climate-related Financial Risk Management for Large Banks. The associations appreciate the FRB’s intent to closely align the proposed principles with the proposed climate-related financial risk consultations issued by both the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC). Given the intensifying pace of climate change, it is important to have a continuous dialogue with banking regulators to develop the best approach to the treatment of climate-related financial risks.
With a few exceptions highlighted in our response, our comments on the proposed principles are similar to the comments we provided in response to the OCC and the FDIC’s proposals. The associations support the US Agencies’ goal to ensure the safe management of banks’ exposures to climate-related financial risks. We support public sector efforts to establish regulatory principles and guidance surrounding climate-related financial risks that is consistent with the existing risk management operational framework.