Climate change and its impact on the risk it presents to national banks took a bigger role Tuesday with the appointment by the banks’ regulator of a climate change risk officer and membership in a global regulators’ group assessing “greening” of financial systems.
The Office of the Comptroller of the Currency (OCC) said, in a release, that nearly 30-year OCC veteran Darrin Benhart is now the agency’s climate change risk officer. The OCC said Benhart’s appointment is part of the agency’s “holistic efforts” to ensure the federal banking system “proactively manages the financial risks of climate change and its efforts to improve its energy efficiency and reduce its overall carbon footprint, which align with broader efforts across the federal government.” The position will report to the senior deputy comptroller for supervision risk and analysis.
Benhart, who joined the OCC in 1992, shifts to the new position from his role in the agency’s large bank supervision in the team overseeing Bank of America, the OCC said. He previously served as deputy comptroller for supervision risk management, chairing the OCC’s National Risk Committee, which identifies primary and emerging areas of risk to the national bank system, and – the OCC said – “ensuring that the risks are communicated throughout the agency and to the industry.” He has also served as deputy comptroller for credit and market risk, where he was a principal advisor on risks facing the banking system and set policies for the OCC’s commercial and retail credit policy units.
The agency also announced it has joined the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), a group of central banks and supervisors established in 2017 at the Paris One Planet Summit. Members of nations that belong to the group do so voluntarily, according to the group, to “share best practices and contribute to the development of environment and climate and risk management in the financial sector and to mobilize mainstream finance support the transition toward a sustainable economy.”
More than 90 central banks and supervisors (including the Board of Governors of the Federal Reserve) already belong to the group.
The OCC said it is joining the NGFS to collaborate with central banks and peer supervisors to share best practices and contribute to the development of climate risk management in the financial sector.
In a statement, Acting Comptroller of the Currency Michael J. Hsu said that in May he indicated the agency would take a two-pronged approach in addressing climate change. Those are: engaging and learning from others; and supporting the development and adoption of effective climate risk management practices at banks.
“Prudently managing climate change risk is a safety and a soundness issue,” said Hsu. “The changes announced today will enable the agency to be more proactive in accelerating the development and adoption of robust climate change risk management practices, especially at the larger banks.”