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Climate Risk Scorecard

Assessment Key
Notable ProgressNotable Progress
Some ProgressSome Progress
No ProgressNo Progress
Not ApplicableNot Applicable

Notable progress

Reasoning

For more information about our key findings and learnings, please download the 2024 Climate Risk Scorecard report.

Notable Progress

Reasoning

For more information about our key findings and learnings, please download the 2024 Climate Risk Scorecard report.

Methodology

We assessed the extent to which the agency has expanded and established sustainable, well-resourced capacity “to define, identify, measure, monitor, assess, and report on climate-related financial risks and their effects on financial stability.” (FSOC 1.3). 

This includes investments in staffing, appointing senior staff, forming internal working groups and/or committees, staff training, investments in technological and analytical capabilities, and financial resources provided to staff working on these issues. 

Notable Progress

Reasoning

For more information about our key findings and learnings, please download the 2024 Climate Risk Scorecard report.

Methodology

We assessed the extent to which the agencies have made information and data available to the public. 

  • “[I]nclude descriptions of their activities related to climate-related financial risks in their annual reports and consider incorporating climate-related financial risks in relevant risk reports that they publish, as appropriate ... [and] within the context of each member’s mandate and authority.” (FSOC 1.4). 

  • “[M]ake climate-related data for which they are the custodians freely available to the public, as appropriate and subject to any applicable data confidentiality requirements.” (FSOC 1.5). 

Some Progress

Reasoning

For more information about our key findings and learnings, please download the 2024 Climate Risk Scorecard report.

Methodology

We assessed the extent to which the agency - consistent with its mandate and authorities and its membership in the Financial Literacy and Education Commission (FLEC) - has assessed and made progress on addressing climate risks to financially vulnerable communities.  

  • “[C]oordinate the analyses of climate-related financial risks ... with their efforts to understand impacts on communities and households. FSOC members should, as applicable, integrate these analyses into the[ir annual] public reports.” (FSOC 1.6). 

  • “[E]valuate climate-related impacts and the impacts of proposed policy solutions on financially vulnerable populations when assessing the impact of climate change on the economy and the financial system.” (FSOC 1.8).  

  • “[FLEC members should] analyze and understand the impact of climate change on the financial well-being of financially vulnerable populations. FSOC members that are also FLEC members should actively participate in this analysis.” FLEC members include the Fed, OCC, FDIC, NCUA, SEC, CFTC, and FHFA. (FSOC 1.9).  

Notable Progress

Reasoning

For more information about our key findings and learnings, please download the 2024 Climate Risk Scorecard report.

Methodology

We assessed the extent to which the agencies have advanced research and data collection on climate risk.  

  • “Identify[] the data needed to evaluate the climate-related financial risk exposures of regulated entities and financial markets.” (FSOC 2.1).   

  • “Perform[] an internal inventory of currently collected and procured data and its relevance for climate risk assessments." (FSOC 2.1).   

  • “Develop[] a plan for procuring necessary data through data collection, data sharing arrangements and information purchased from data providers or other sources.” (FSOC 2.1).   

  • “[F]acilitate the sharing of climate-related data across FSOC members and non-FSOC member agencies to assess climate-related financial risk, consistent with data confidentiality requirements.” (FSOC 2.2)    

  • “[D]evelop consistent data standards, definitions, and relevant metrics ... to facilitate common definitions of climate-related data terms, sharing of data, and analysis and aggregation of data.” (FSOC 2.5) 

Not Applicable

Reasoning

For more information about our key findings and learnings, please download the 2024 Climate Risk Scorecard report.

Methodology

We assessed the extent to which the agencies have begun to assess, develop, and conduct climate scenario analyses at their supervised entities.  

  • “[C]ollaborate with external experts to identify climate forecasts, scenarios, and other tools necessary to better understand the exposure of regulated entities to climate-related risks and how those risks translate into economic and financial impacts.” (FSOC 4.1). 

  • “[U]se scenario analysis, where appropriate, as a tool for assessing climate-related financial risks, taking into account their supervisory and regulatory mandates and the size, complexity, and activities of regulated entities.” (FSOC 4.3). 

  • “[C]onsider using common scenarios that build on existing work, including scenarios developed by NGFS and work at the FSB, as appropriate for the institutions and markets under consideration.” (FSOC 4.4). 

Notable Progress

Reasoning

For more information about our key findings and learnings, please download the 2024 Climate Risk Scorecard report.

Methodology

We assessed the extent to which the agency has enhanced public reporting requirements for their regulated entities. The market is currently mispricing climate risk. The lack of consistent disclosure by entities supervised by U.S. financial regulators is an obstacle to market efficiency and to the accurate pricing of climate risk.  

  • “[R]eview their existing public disclosure requirements and consider, as appropriate, updating them to promote the consistency, comparability, and decision-usefulness of information on climate-related risks and opportunities.” (FSOC 3.1). 

  • “[C]onsider enhancing public reporting requirements for climate related risks in a manner that builds on the four core elements of the TCFD.” (FSOC 3.2). 

  • “[C]onsider whether such disclosures should include disclosure of GHG emissions.” (FSOC 3.4). 

  • “[R]eview banks’ public regulatory reporting requirements to assess whether enhancements are needed to provide market participants with information on institutions’ climate-related financial risks, taking into account a bank’s size, complexity, and activities.” (FSOC 3.7). 

Notable Progress

Reasoning

For more information about our key findings and learnings, please download the 2024 Climate Risk Scorecard report.

Methodology

We assessed the extent to which the agencies have enhanced supervisory scrutiny of climate risk management at their supervised entities to ensure their resilience and the resilience of our financial system.                 

  • “[C]larif[y] or enhanced risk management expectations ... [and] guidance.” (FSOC 4.8). 

  • “[R]eview[] regulated entities’ efforts to address climate-related risks." (FSOC 4.6).

  • “[R]eview[] existing ... guidance ... to identify where clarifications and enhancements are needed.” (FSOC 4.7). 

Not Applicable

Reasoning

For more information about our key findings and learnings, please download the 2024 Climate Risk Scorecard report.

Methodology

We assessed the extent to which the agencies have incorporated climate risk management expectations into their regulatory requirements for supervised entities to ensure their resilience and the resilience of our financial system.

  • “[C]larif[y] or enhanced risk management ... requirements.” (FSOC 4.8). 

  • “[R]eview[] existing regulations ... and regulatory reporting to identify where clarifications and enhancements are needed.” (FSOC 4.7). 

Other Agency Scorecards:
About the U.S. Department of the Treasury

The U.S. Department of the Treasury’s (Treasury) mission is to maintain a strong economy and create economic and job opportunities by promoting economic growth and stability at home and abroad, fostering improved governance in financial institutions, and managing the U.S. government’s finances and resources effectively. While Treasury itself has limited direct rulemaking authority over financial entities, it is responsible for policy formulation, promoting economic conditions that protect the integrity of the U.S. financial system, and fostering improved governance in financial institutions. 

The Secretary of the Treasury chairs the Financial Stability Oversight Council (FSOC), which is responsible for identifying risks to the financial stability of the country and responding to emerging threats. FSOC facilitates regulatory coordination among financial regulators, facilitates information sharing and collection, designates firms and financial market utilities as systemically important, and intervenes with firms that pose a threat to financial stability. 

The Office of Financial Research (OFR) supports FSOC and member agencies by collecting and providing data to FSOC, performing research, developing tools for risk measurement and monitoring, and assisting member agencies in determining the types and formats of necessary data.  

The Office of State and Local Finance (OSLF) coordinates Treasury’s policies on state and local issues, providing research and analysis on infrastructure financing, developing policy responses to fiscally stressed entities, and serving as a central point of contact for state and local finance officials, municipal market regulators, standards bodies, and bankers. 

The Federal Insurance Office (FIO) monitors all aspects of the insurance sector, including the extent to which traditionally underserved communities have access to affordable non-health insurance products. It also represents the U.S. on prudential aspects of international insurance matters.  

The Treasury works with other federal agencies and international financial institutions to improve the  safeguards of our financial systems and prevent economic and financial crises. As noted by FSOC, “[t]he increasing economic effects of climate change imply that climate-related financial risks are an emerging threat to the financial stability of the United States.” By addressing these risks, Treasury is fulfilling its duties to contribute to the greater stability and resiliency of the broader U.S. economy.

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