By Isla Binnie and Chris Prentice
(Reuters) – The U.S. Treasury Department’s Office of the Comptroller of the Currency (OCC) carried out its first climate risk assessment of more than two dozen banks in recent months, laying the groundwork for heightened scrutiny of Wall Street’s accounting for such threats, people familiar with the matter said.
Dubbed a “discovery review,” the previously unreported process involved the regulator assessing how banks are accounting for the impact of climate change on their loan books and business, as well as exploring how they manage energy finance and greenhouse gas emissions, according to the sources.
The exams shed light on how the OCC plans to implement guidance on climate risk for banks with more than $100 billion in assets, which it issued in October together with the Federal Reserve and the Federal Deposit Insurance Corporation. More than 30 banks meet this threshold, according to the latest OCC data available on its website.
Identifying and acting on this risk has been one of U.S. President Joe Biden’s key administration priorities.
The regulator used the discovery review to establish a baseline of banks’ practices so it has a yardstick with which to assess…
