The Federal Housing Finance Agency today issued guidance to the Federal Home Loan Banks on managing climate-related risks “to support a safe and sound operating environment.”
The guidance states that each FHLBank should integrate climate-related risk management into its existing enterprise risk management framework. Such frameworks should cover governance, metrics and data, scenario analysis, climate-related risk reporting and communication, and natural disaster response and support for climate resiliency, according to FHFA.
“Although it is difficult to predict exactly how and when climate-related risks will manifest themselves, the FHLBanks should be prepared to respond to these risks to operate in a safe and sound manner that supports their mission,” the guidance states.
