Climate change

JPMorgan Chase hired Ben Ratner from the Environmental Defense Fund to help advise banking clients on lowering their carbon footprint to combat climate change.

Sen. Elizabeth Warren accused the financial services industry of being a major contributor to climate change and urged U.S. regulators to hold it to account.

The Office of the Comptroller of the Currency released draft “supervisory principles” for banks with more than $100 billion of assets, saying they should account for weather-related risks. Officials said public feedback on the guidelines will help inform more detailed interagency policy next year.

HSBC Holdings is planning to phase out the financing of coal used for generating electricity by 2040, the latest bank to commit to ending support for the greenhouse gas-intensive fossil fuel.

CEO Jane Fraser said the bank isn’t a fan of the idea of simply asking clients to dispose of any so-called brown assets, which would just shift the problem to a new owner.

Two progressive Democratic senators said they oppose the renomination of Federal Reserve Chair Jerome Powell to a second term, joining Elizabeth Warren in urging President Biden to choose someone else.

The OCC is expected by year-end to issue high-level guidance for banks on assessing how they contribute to climate change and how it impacts them. The agency and other regulators may next consider further actions, such as giving Community Reinvestment Act credit for financing environment-friendly projects and even more rigorous stress tests, analysts say.

Directors can urge executives to move more quickly in gauging their institutions’ vulnerability to extreme weather events, said acting Comptroller of the Currency Michael Hsu. He offered a list of five questions every board member should ask senior leaders about their progress.

Federal Reserve Chairman Jerome Powell defended the central bank’s work to examine the effects of a warming planet on the financial system, but said decisions such as whether banks should lend to fossil fuel companies are best left to “elected representatives.”

Acting Comptroller of the Currency Michael Hsu previewed but provided little detail about the “high-level … supervisory expectations” for large institutions. His statement was one of several by regulators to coincide with an international climate change summit.

The Financial Stability Oversight Council's guidelines for regulators avoided measures that banks feared such as fossil fuel loan limits and rigid new stress tests. But the panel is recommending rules that would require financial institutions to disclose their exposure to global warming.

The Financial Stability Oversight Council issued a much-anticipated report with tentative recommendations on how regulatory agencies should begin preparing to contain the risk.

From factoring global warming into the underwriting of government-backed loans to conducting "sensitivity analysis" of banks' ability to withstand severe weather, several government agencies are accelerating efforts to address the impact of climate change on the financial system.

Goldman Sachs CEO David Solomon said the Wall Street firm wouldn’t abruptly stop working with fossil fuel companies, stressing the need for a balanced transition to green energy that avoids higher energy prices.

JPMorgan Chase signed a pledge to align its lending and investment portfolios with net-zero emissions by 2050, joining more than 40 rival financial firms in the Net-Zero Banking Alliance.

The European Central Bank will look at the trading operations of major lenders as part of climate stress tests next year, after judging that an assessment of loan books alone won’t give enough insight into the fallout they face from global warming.

The European Central Bank is stepping up pressure on lenders to prepare for stress tests next year that will show just how vulnerable the industry is to climate change, according to people familiar with the process.

Climate activists broke windows at JPMorgan Chase offices in central London Wednesday as part of two weeks of protests against organizations that support fossil fuels. 

Financial Services Superintendent Linda Lacewell said she will step down Aug. 24, the same day Gov. Andrew Cuomo plans to leave following a sexual harassment investigation. The state’s attorney general found that Lacewell helped with the governor’s public relations response to the allegations.