Senate Bill Would Extend Bank Stress Tests to Climate Risk

What are banks and big financial institutions doing to protect investors from mammoth risks to rising sea levels and other climate change impacts?

Not enough, says Sen. Brian Schatz (D-Hawaii), who is readying legislation that would direct large banks and other financial institutions to conduct stress tests to gauge whether they are well-positioned to absorb climate change risks.

Schatz, tapped in March to chair a Democrats-only Special Committee on the Climate Crisis as a way to raise the profile of the climate issue, told Bloomberg Environment the tests would handle “various shock scenarios.”

Stress tests are run to determine ...