(Feb. 12, 2021) The New York State Department of Financial Services (NYDFS) was cited, again, this week for its position on financial risk through climate change in a report issued by the San Francisco Federal Reserve Bank.
In the report — which outlined the efforts state, national and international financial regulators have taken to identify, assess and manage climate-related financial risks – the New York agency’s actions on the issue are outlined (namely, that it has asked financial institutions under its supervision to incorporate climate-related risks in its exams).
In November, the international Financial Stability Board (FSB) released a report that also noted the New York efforts in its report The Implications of Climate Change for Financial Stability. That report noted that the state advised financial institutions to integrate financial risks from climate change into their governance, risk-management and business strategy frameworks. That direction was reportedly the first time a state supervisory agency for financial institutions has taken such an approach.
New York took additional action on the issue this week, writing to banks that they may receive credit under the New York Community Reinvestment Act (NYCRA) for certain activities intended to address and mitigate the effects of climate change. The agency also provided a non-exhaustive list of activities that may qualify for CRA credit under state rules.