New York State proposes climate risk guidance for financial institutions

The New York State Department of Financial Services has proposed new guidance for banking and mortgage-lending institutions “to help them manage safety and soundness risks related to climate change,” the agency said in a statement. The agency is currently accepting public comments on the guidance until March 21, 2023, and will hold a Jan. 11 webinar to explain the proposal.

The guidance will focus on corporate governance, internal control framework, risk management process, data aggregation and reporting, and scenario analysis. Among other things, institutions will be expected to minimize adverse effects on low- and moderate-income communities while managing climate-related financial risks, DFS said. The agency added that it is seeking to align the guidance with the work of federal and international banking regulators on the management of climate-related financial risk.