Fed and ESG Regulations
The Federal Reserve mainly supervises ESG issues in the U.S. banking system and focuses on climate risk, such as formulating a bank climate regulatory framework and conducting bank climate scenario analysis.
The Fed’s supervisory policy focuses on understanding the impact of climate change on the banking system rather than formulating specific climate policies. The Federal Reserve is responsible for identifying, measuring, monitoring and managing climate risks, and specific climate policies should be formulated by government (statement from the Federal Reserve’s official website).
The Federal Reserve announces that it will conduct climate scenario analysis and testing for six large banks to improve the ability of the industry and regulators to identify, measure, monitor and manage climate-related financial risks
At the beginning of December, the Federal Reserve planned to develop a regulatory framework for the issue of climate risk exposure management of large banks. The proposed framework is applicable to banking