The American Bankers Association has recognized the role of the financial services industry in transitioning to a sustainable economy but has voiced caution with regard to regulatory intervention.
The ABA has stated support for the role of the financial sector in delivering the goals of the Paris Agreement, but emphasized the importance of private sector innovation and market-based solutions in doing so. With regard to ESG disclosure, the ABA has voiced support for enhanced disclosures and convergence on an international standard. In a 2021 letter to the SEC, the ABA appeared to support the need for some regulated climate risk disclosure, but advocated for a flexible, phased-in approach with liability protections.
The ABA has a mixed perspective 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 they say would “restrict finance” with the aim of achieving climate policy goals, and argued against the need for “inappropriate governmental intervention” with regard to bank portfolio disclosures. However, the ABA has called for financial regulators and risk professionals to work together to develop climate risk modeling.
There is evidence that the ABA supports incorporating ESG factors into investor duties. In 2020, the ABA voiced opposition to Department of Labor rules that would limit fiduciaries’ ESG investing and voting on ESG issues.
The ABA’s website lists their policy and advocacy efforts clearly, with some details about actions taken while some information is reserved for members. Information about board leadership, including committee chairs, is easily accessible, while details of general membership are unavailable.