New York Urges Banks to Beef Up Reviews of Climate Change Risk

New York regulators want the banks they oversee to incorporate climate change into their risk management efforts, including assessing how the lenders would perform in extreme weather scenarios.

Banks will be encouraged to weigh the physical risks of climate change to their facilities, as well as to mortgages and other loans they issue and investments they hold, under final climate guidance released Thursday by the New York State Department of Financial Services. It comes exactly one year after the regulator proposed the guidelines.

Bank boards and executives will also be expected to evaluate the so-called transition risk present in their ...