American Bankers Association (ABA)

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Washington DC, United States
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The American Bankers Association (ABA) appears to have had mixed engagement with sustainable finance policy, generally voicing caution with regard to regulatory intervention in the banking sector.

The ABA appears to recognize the risk climate change poses to the financial system. A 2021 joint paper on ABA’s website states support for urgent action to tackle climate change and deliver the goals of the Paris Agreement, but emphasizes the importance of private sector innovation and market-based solutions in doing so. At an ABA Summit in March 2022, CEO Rob Nichols appeared not to support regulatory action on ESG issues for banks.

The ABA appears unsupportive of regulated corporate ESG disclosures. In a 2021 joint paper and in comments to the Sustainability Accounting Standards Board in 2020, the ABA stated support for enhanced disclosures and convergence on an international standard, but did not clearly state whether it supports regulatory intervention. In response to the SEC’s request for comment on climate disclosures in 2021, the ABA voiced support for a climate risk disclosure regime but advocated for a flexible approach and a significant transition period. The ABA has not supported the SEC's 2022 proposed climate disclosure rule, questioning the value of the proposal in a May 2022 podcast and urging the Commission to "significantly revise - or withdraw altogether and repropose" the rule in a June 2022 blog post and comment letter. In May 2022, the ABA signed onto a joint letter to the to California Assembly Natural Resources Committee opposing SB 260, a corporate greenhouse gas disclosure bill.

The ABA appears to have a mixed position on incorporating ESG factors into investor duties. In 2021, the ABA stated opposition to an OCC rule that sought to limit ESG investing, calling it “ill-advised.” In 2020, the ABA voiced opposition to Department of Labor rules that would limit fiduciaries’ ESG investing and voting on ESG issues. However, in comments on the 2021 proposed reversal of these rules, the ABA asked the Department to alter and remove references to ESG considerations in rule language.

The ABA has a mixed but overall negative position on incorporating ESG factors into risk management and prudential regulation. In a 2021 letter to the Federal Housing Finance Agency, the ABA wrote that stakeholders are “only in the early stages of developing the necessary expertise” to change the regulatory framework with respect to climate factors. Relatedly, the ABA has voiced opposition to prudential regulation that tries to “regulate other industries indirectly” or carry out “environmental or other social policy goals.” In response to the OCC’s proposed Principles for Climate-related Financial Risk Management for Large Banks in 2022, the ABA did not support regulatory action on climate-related financial risk, calling it “premature.” Similarly, in 2022 comments to the Basel Committee for Banking Supervision, the ABA advocated for a less ambitious approach than outlined in the Committee’s Principles for Effective Management and Supervision of Climate-related Financial Risks.

The ABA has posted the letters it sends to regulators on the “Policy & Advocacy” page of its website, clearly disclosing its comments on various policies including sustainable finance policies. ABA has listed board membership but not general membership.

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