The Office of the Comptroller of the Currency's recent review of major banks reveals significant shortcomings in their integration of climate risk into business strategies and operations.
The OCC found that while all banks engaged in some level of climate risk identification, their approaches and development stages varied greatly, indicating a need for standardization.
While most banks are recognizing the risks climate change presents, many have not yet started employing climate scenario analysis, highlighting a critical gap in risk management.
Some industry experts argue that the insufficient preparation regarding climate risks puts trillions of dollars in assets at risk, raising concerns about systemic financial stability.
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