Climate Finance Policy Engagement Analysis
Climate Lobbying Overview: The Bank Policy Institute (BPI) 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: In several different blog posts, BPI has contested the assertion that climate change poses a risk to the stability of the financial system. In a 2022 post, BPI wrote that climate scenario analysis “calls into question” whether climate risks are material for banks. In 2024, a BPI blog post asserted that climate risks “do not rise to the level of capital risks for banks.”
Position on Regulated Corporate Climate Disclosure: BPI has repeatedly opposed corporate climate disclosure policies. After the SEC proposed its climate disclosure rule in March 2022, BPI issued a press release stating that the proposal was overly ambitious, and urged the SEC to proceed in a more “measured” manner. In its letter to the Commission in June 2022, BPI outlined several objections to the proposed climate disclosure rule, including Scope 3 disclosure requirements and several qualitative and quantitative risk disclosure provisions. In July 2022 BPI commented its objections to the International Sustainability Standards Board (ISSB) draft climate disclosure standards, and in an October 2022 press release BPI opposed the ISSB’s decision to include Scope 3 emissions in its global baseline for climate-related disclosure. BPI also opposed California emissions disclosure bills in a 2022 letter to the California State Assembly and a 2023 letter to the bill’s sponsor.
Position on Incorporating Climate Factors Into Risk Management/Prudential Regulation: BPI has been generally unsupportive of climate-related prudential regulation, repeatedly taking the position that banks are already managing climate-related risks in a prudent manner. A 2022 blog post suggested that regulatory efforts to incorporate climate risk into risk management supervision are unnecessary, given that banks are “well-placed to manage climate-related financial risks.” In its 2022 and 2023 comments on proposed climate-related financial risk management principles from US banking regulators including the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve, BPI opposed “overly prescriptive” risk management requirements and opposed a requirement for banks’ boards to assure that public statements on climate strategies and commitments are consistent with internal strategies and risk appetite. In 2023 comments to the New York Department of Financial Services BPI supported the Department’s “flexible approach” to its proposed climate risk management guidance but opposed any new regulation and objected to climate-related board and management responsibilities. BPI has also engaged with proposed guidance from the Basel Committee on Banking Supervision (BCBS) which is likely to inform government policy. In a 2024 letter, BPI objected to the BCBS proposed climate disclosure standards for bank supervisors, asserting that climate strategy, emissions, and physical risk exposure are outside the scope of Basel Pillar 3 disclosures which are intended to address financial risk and capital adequacy.