OCC’s Acting Comptroller Urges Bank Boards to Start Asking about Climate Risk
November 15, 2021
On November 8, Office of the Comptroller of the Currency’s (OCC) Acting Chair Michael Hsu urged bank boards to start examining how banks are managing and reporting climate risks. In particular, Hsu encourages boards to ask the following five questions:
- What is our overall exposure to climate change?
- Which counterparties, sectors, or locales warrant our heightened attention and focus?
- How exposed are we to a carbon tax?
- How vulnerable are data centers and other critical services to extreme weather?
- What can we do to position ourselves to seize opportunities from climate change?
As reported in last week’s Policy and Capital Markets Briefing
, Hsu also shared that the OCC will develop high-level climate risk management supervisory expectations for large banks and issue framework guidance for comment by the end of the year. In the November 8 document, he added that next year the OCC will issue detailed guidance for each risk area. “The detailed guidance will build on a range-of-practices review that will launch this week, industry and climate groups’ input, and lessons from other jurisdictions.”