When the world shut down for Covid in 2020, global carbon dioxide emissions declined by 6.4%. To achieve the Paris Agreement, the world needs them to go down by around 7.6% a year, without lockdowns.
This is something the banking industry is keenly aware of.
In March, Michael J Hsu, acting US comptroller of the currency, delivered a speech to the Institute of International Bankers in Washington DC at which he laid out some basics.
“Climate change is generating risk exposures for banks," he said. "Prudently risk managing those climate-related exposures is a safety and soundness imperative.”
He reminded his audience that the Office of the Comptroller of the Currency is “laser-focused” on the safety and soundness aspects of climate-change risks.
Weaknesses in risk management could adversely affect a bank’s safety and soundness, as well as the overall financial system
Hsu admitted: “Unlike regulators in some other jurisdictions, we do not yet have a mandate to help meet carbon-reduction targets.
