Wall Street Banks Must Disclose Climate Threats by Next Year, OCC Says
(Bloomberg) -- Wall Street banks should be ready to answer key questions about their exposure to climate change by next year, said Michael Hsu, the acting chief of the Office of the Comptroller of the Currency.
“Time is running out,” Hsu said Monday in a speech that outlined how U.S. banks will be required to report the risks they face from a warming planet. “We are racing against increasing numbers of costly extreme weather events.”
Hsu encouraged bank boards to grill executives about how exposed their firms are to volatile weather events and how vulnerable their data infrastructure may be. Directors will play a “pivotal role” in pushing banks’ top executives to meet expectations, he said, and the management teams should be able to answer questions with confidence “by this time next year.”
Hsu said officials are still evaluating what specifically the agency will require banks to disclose. The OCC expects to issue more formal climate-change guidance by the end of next month, he said.
The White House started the federal push to address climate risks in January when President Joe Biden issued an executive order calling for agencies to make the issue a priority. A group of financial regulators that makes up the Financial Stability Oversight Council has already deemed rapidly changing weather a threat to financial stability.
©2021 Bloomberg L.P.