Governor Kathy Hochul recently announced that the New York State Department of Financial Services adopted guidance for New York State-regulated banking and mortgage institutions in order “to help them manage their material financial and operational risks associated with climate change.”
Governor Hochul said:
“Climate change is impacting every sector of New York’s economy, including financial services. As the financial capital of the world, I’m proud that we are proactively addressing climate-related financial risks so that New Yorkers can continue to have access to affordable financial services.”
DFS Superintendent Adrienne A. Harris said:
“To protect New Yorkers from financial harm, regulated institutions must anticipate and respond to new and emerging risks. Today’s guidance provides these institutions with a balanced, data-driven approach to preserve safety and soundness and operational resiliency by addressing the risks posed by climate change.”
The guidance is designed to support Institutions’ efforts “to identify, measure, monitor, and control their material climate-related financial and operational risks in a manner consistent with current risk management principles.”
It addresses key components “of prudent risk management by Institutions — including corporate governance, internal control frameworks, risk management processes and data collection and analysis — so that Institutions will incorporate assessment of these risks into their existing risk frameworks, taking a strategic and forward-looking approach.”
DFS has finalized the guidance “with careful consideration of the valuable feedback received from regulated entities and other key stakeholders. In response to feedback, as part of today’s announcement, the Department has also published available resources to assist smaller organizations as they work to adopt measures that address their climate-related risk.”
The New York State Department of Financial Services (DFS or NYSDFS) is the department of the New York state government responsible “for regulating financial services and products, including those subject to the New York insurance, banking and financial services laws.”