The Board is conducting a pilot CSA exercise to learn about large banking organizations’ climate risk-management practices and challenges and to enhance the ability of both large banking organizations and supervisors to identify, measure, monitor, and manage climate-related financial risks.
This pilot CSA exercise will support the Board’s responsibilities to ensure that supervised institutions are appropriately managing all material risks, including financial risks related to climate change.
To accomplish these objectives, the Board designed the pilot CSA exercise to gather qualitative and quantitative information about the climate risk-management practices of large banking organizations. Over the course of the exercise, the Board will engage with participants to understand their approaches and challenges with respect to the financial risks of climate change. Information collected and discussed with participants will include detailed documentation of governance and risk-management practices, measurement methodologies, data challenges and limitations, estimates of the potential impact on specific portfolios, and lessons learned from this exercise that could inform any future CSA exercises.