Ceres finds U.S. financial regulators have made significant progress in addressing climate-related financial risk over the past year

A new scorecard released today by Ceres shows that U.S. financial regulators across nine federal agencies have taken 230 actions since April 2021 to tackle the financial risks of climate change, a clear sign of regulatory progress.

The 2022 Climate Risk Scorecard: Assessing U.S. Financial Regulator Action on Climate Financial Risk, provides an in-depth analysis of the action steps that the agencies have taken to protect our capital markets, financial institutions, and communities from the effects of climate risk. Among the agencies scored include the Federal Reserve Bank (The Fed), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the National Credit Union Administration (NCUA), the U.S. Securities and Exchange Commission (SEC), the Municipal Securities Rulemaking Board (MSRB), the Commodity Futures Trading Commission (CFTC), the Federal Housing Finance Agency (FHFA), and the U.S. Department of the Treasury.

"The scorecard is designed to both highlight the hard work federal agencies are doing to address climate-related financial risk and draw attention to the areas that need work," said Steven M. Rothstein, Managing Director of the Ceres Accelerator for Sustainable Capital Markets at Ceres. "The goal of these agencies is to ensure the safety and soundness of our financial system. They have identified climate change as a significant financial risk and are working to protect all sectors of our economy from its impacts."

The agencies are members of the U.S. Department of the Treasury's Financial Stability Oversight Committee (FSOC), which mandates collective action and accountability for identifying risks and responding to emerging threats to financial stability of the U.S. economy. In October 2021, the FSOC released a report, affirming for the first time that climate change is an emerging threat to the U.S. financial system.

Key findings include: 

• All nine agencies have publicly affirmed climate as a systemic risk to the financial system.

• All nine agencies have made progress in identifying the data needed to evaluate these risks and develop a plan to procure data they need.

• For those agencies with authority that encompasses the needs of financially vulnerable communities, there is greater variation in progress.

• Each agency has designated staff to focus on climate-related risks, with all but one appointing senior staff to lead those teams.

• Several agencies have begun to incorporate climate risk into their supervisory activities.