SR 23-9:
Principles for Climate-Related Financial Risk Management for Large Financial Institutions
OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D.C. 20551
DIVISION OF
SUPERVISION AND REGULATION
October 24, 2023
TO THE OFFICER IN CHARGE OF SUPERVISION AT EACH FEDERAL RESERVE BANK
Principles for Climate-Related Financial Risk Management for Large Financial Institutions
Applicability: This guidance applies to financial institutions with over $100 billion in total consolidated assets.
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency have issued the attached interagency guidance, “Principles for Climate-Related Financial Risk Management for Large Financial Institutions” (the principles).
The principles are intended to support efforts by financial institutions to focus on key aspects of climate-related financial risk management. The principles cover six areas: governance; policies, procedures, and limits; strategic planning; risk management; data, risk measurement, and reporting; and scenario analysis. The principles also describe how climate-related financial risks can be addressed in other risk categories including credit, liquidity, other financial risk, operational, legal and compliance, and other nonfinancial risk.
Reserve Banks are asked to distribute this letter to supervised financial institutions in their districts, as well as to appropriate supervisory staff. In addition, questions may be sent via the Board’s public website.1
signed by
Michael S. Gibson
Director
Division of
Supervision and Regulation
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SR letter 21-3 / CA letter 21-1, “Supervisory Guidance on Board of Directors’ Effectiveness”