Climate Finance Policy Engagement Analysis
Climate Lobbying Overview: The American Bankers Association (ABA) has been actively engaged on climate-related financial policy in the US, opposing efforts to regulate corporate climate disclosure and incorporate climate risk into prudential regulation.
Top-Line Messaging on Climate-Related Financial Policy: ABA appears cautious with regard to climate-related regulation on the financial sector. On its website, ABA states support for a market-based response to climate risk over government regulation, and emphasizes that policy changes should occur in the real economy rather than the financial system. In 2022, ABA sent a letter to US banking regulators that cautioned against using banks as "proxies to effectuate environmental or other social policy goals," specifically referring to ESG guidance and regulatory proposals.
Position on Regulated Corporate Climate Disclosure: ABA has opposed corporate climate disclosure policies at the federal and state level. In a 2022 blog post and comment letter ABA urged the SEC to “significantly revise - or withdraw altogether and repropose” its climate disclosure rule. In 2023 and 2024 statements to Congress ABA again advocated for the rule to be withdrawn and urged lawmakers to exercise oversight over the SEC’s rulemaking. ABA also opposed the Federal Acquisition Regulatory Council’s proposed climate disclosure rule in a 2023 comment letter. In California, ABA opposed climate disclosure bills in 2022 and 2023. In a 2022 letter to the California State Assembly ABA asserted that Scope 3 disclosure would be “difficult and expensive” and warned that the California rule could conflict with the SEC climate disclosure rule. In 2023 ABA sent a letter to the bill’s sponsor opposing the bill and its Scope 3 disclosure requirement. After the bill was passed, ABA sent a letter to the California Governor, urging him to veto the legislation.
Position on Incorporating Climate Factors Into Investor Duties: ABA has not supported regulation to explicitly include climate factors in investor duties. But, it has also been opposed to efforts to limit the ability of financials to consider climate factors (so-called “anti-ESG” efforts). In 2022 comments to the Department of Labor, ABA did not support regulatory action to require fiduciaries to consider climate risk in retirement plan decision making. In 2023, ABA advocated against the American Legislative Exchange Council (ALEC) adopting a model policy that would require states to cease doing business with companies deemed to be “boycotting” fossil fuels, stating in media reports that “government should not be dictating business decisions to the private sector.”
Position on Incorporating Climate Factors Into Risk Management/Prudential Regulation: ABA has been generally unsupportive of climate-related prudential regulation. In a 2022 position paper, ABA outlined principles for climate risk regulation, asserting that it must be “appropriately scaled” and not used to carry out broader policy objectives. In response to the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation’s (FDIC) proposed principles for climate-related financial risk management in 2022, 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 (BCBS), ABA advocated for a less ambitious approach than outlined in the Committee’s Principles for Effective Management and Supervision of Climate-related Financial Risks. In 2023 comments to the Federal Reserve, ABA opposed a proposed requirement for financials’ boards to assure that public statements on climate strategies and commitments are consistent with internal strategies and risk appetite. In 2024 comments to the BCBS, ABA outlined significant objections to proposed disclosure standards that are likely to inform prudential regulation, asserting that emissions, transition plans and climate targets, and physical risk exposure are outside of the scope of Pillar 3 disclosures which are intended to address financial risk and capital adequacy. Additionally, in a 2024 memo to the House Financial Services Committee, ABA supported a bill that would block the Federal Insurance Office from collecting climate risk data from insurance companies.