On October 24, 2023, the US federal banking regulators finalized interagency principles for the effective management and supervision of climate-related financial risks (the “Climate Principles”).1 The Climate Principles are targeted at larger banking organizations and are intended to convey consistent supervisory expectations regarding how climate-related financial risks should be managed.
The US federal banking regulators had separately proposed the Climate Principles in 2021 and 2022.2 The Climate Principles mostly follow the proposals, with only a few noteworthy changes.
Importantly, Climate Principles are effective immediately. In this Legal Update, we review the changes made to the draft Climate Principles and discuss what the industry may expect next.
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