Climate change

Bank of Montreal laid out a plan to sharply reduce emissions connected to loans to the energy and power-generation sectors by 2030 as its aims for a longer-term goal of being net zero.

Treasury Secretary Janet Yellen outlined steps the department is taking to mitigate climate risk, including a report on the regulatory gaps in the insurance industry.

Royal Bank of Canada shareholders will vote on whether the bank should tighten its standards for sustainable finance, action inspired by a 2021 pipeline financing deal that was criticized for greenwashing and general concern over lax standards for so-called sustainability-linked debt.

The world’s leading rater of green credentials is rewarding some of Wall Street’s biggest banks even though they continue to lend billions of dollars to fossil-fuel companies.

Treasury Secretary Janet Yellen said it’s too early to contemplate adjusting capital requirements for U.S. banks based on how much risk they face from climate change.

The Science Based Targets initiative (SBTi) is weighing whether to set a hard deadline for financial firms to halt new fossil-fuel investments, if they want their net-zero emissions targets verified by the United Nations-backed group.

Pat Toomey, the top Republican on the Senate Banking panel, questioned the backgrounds of President Biden’s Federal Reserve picks amid a brewing conflict over diversity at the central bank and its role in dealing with climate change.

Europe is imposing new requirements on how banks report environmental risks and carbon targets, to give investors a better picture of the threats that climate change poses to the industry.

“Our intention is to work with all our clients, including our fossil-fuel clients, to develop credible plans and transition to net zero together,” Chief Executive Jane Fraser said.

Fed Gov. Lael Brainard, President Biden's nominee for Federal Reserve vice chair, sought to assure GOP members of the Senate Banking Committee she favors a more limited supervisory approach that would help larger banks identify pockets of risk in their loan portfolios.

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.”