Bank Regulators Rescind Climate Risk Guidance

The OCC, the Federal Reserve Board of Governors, and the FDIC rescinded interagency guidance that outlined principles for how large financial institutions should manage climate-related financial risks.

The rescinded document, titled "Principles for Climate-Related Financial Risk Management for Large Financial Institutions," was originally issued on October 30, 2023, and applied to financial institutions with over $100 billion in assets. 

In the rescission notification, the agencies stated they did not believe the specific principles for climate-related financial risk were necessary. They also expressed concern that the guidance "could distract from the management of other potential risks" already covered by the banks' existing risk management processes.

The regulators pointed to existing safety and soundness standards that require all insured depository institutions to maintain effective risk management processes for all material risks, including emerging ones. The OCC had previously withdrawn its individual participation from the principles on March 31, 2025, preceding this joint rescission.

The agencies clarified that this action does not prohibit financial institutions from considering any particular risk, but it formally withdraws the specific framework for climate risk that was established in 2023.