II 

116TH CONGRESS 

2D SESSION S. 5041 

To establish the Advisory Committee on Climate Risk on the Financial 

Stability Oversight Council. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 17, 2020 

Mrs. FEINSTEIN (for herself and Ms. CORTEZ MASTO) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To establish the Advisory Committee on Climate Risk on 

the Financial Stability Oversight Council. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Addressing Climate 

5 Financial Risk Act of 2020’’. 

6 SEC. 2. ADVISORY COMMITTEE ON CLIMATE RISK. 

7 (a) IN GENERAL.—Subtitle A of the Financial Sta8 bility Act of 2010 (12 U.S.C. 5321 et seq.) is amended 

9 by inserting after section 121 (12 U.S.C. 5331) the fol10 lowing: 


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1 ‘‘SEC. 121A. ADVISORY COMMITTEE ON CLIMATE RISK. 

2 ‘‘(a) ESTABLISHMENT.—There is established in the 

3 Council the Climate Risk Advisory Committee, which 

4 shall— 

5 ‘‘(1) consult with the Council in the drafting by 

6 the Council of an annual report on climate risk re7 quired under subsection (e) and other climate risk 

8 matters; and 

9 ‘‘(2) meet with the Council not less frequently 

10 than once per year. 

11 ‘‘(b) MEMBERSHIP.— 

12 ‘‘(1) IN GENERAL.—The Committee shall con13 sist of the following members: 

14 ‘‘(A) Four members who are climate 

15 science experts, of whom— 

16 ‘‘(i) 1 shall be appointed by the Sec17 retary of Energy; 

18 ‘‘(ii) 1 shall be appointed by the Ad19 ministrator of the Environmental Protec20 tion Agency; and 

21 ‘‘(iii) 2 shall be appointed by the Di22 rector of the National Science Foundation. 

23 ‘‘(B) Eight members who are experts in 

24 climate economics or climate financial risk ap25 pointed by the Council, of whom not fewer than 

26 1 member is each an expert in— 


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1 ‘‘(i) insurance; 

2 ‘‘(ii) capital markets; 

3 ‘‘(iii) banking; 

4 ‘‘(iv) international financial markets; 

5 and 

6 ‘‘(v) housing. 

7 ‘‘(2) PROHIBITION.—No member of the Com8 mittee may be employed by a company within the ju9 risdiction of a member agency of the Council. 

10 ‘‘(c) TERM.—The members of the Committee shall be 

11 appointed for 3-year terms, except that the initial terms 

12 of the first members of the Committee shall be staggered 

13 so that— 

14 ‘‘(1) 4 members serve terms of 3 years; 

15 ‘‘(2) 4 members serve terms of 2 years; and 

16 ‘‘(3) 4 members serve terms of 1 years. 

17 ‘‘(d) CONSULTATION.—The Council shall consult 

18 with the Committee in carrying out the requirements of 

19 this section. 

20 ‘‘(e) REPORT ON CLIMATE FINANCIAL RISK.—Not 

21 later than 270 days after the date of enactment of this 

22 section, the Council shall, in coordination with the Com23 mittee and the Deputies Committee of the Council, publish 

24 a report that— 

25 ‘‘(1) assesses— 


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1 ‘‘(A) the potential impact of climate risk 

2 on the financial stability of the United States; 

3 ‘‘(B) the extent to which Federal and 

4 State financial regulatory agencies have suffi5 cient expertise on climate risk; and 

6 ‘‘(C) the quality of data available to Coun7 cil members to properly assess climate financial 

8 risk and any gaps in data that exist; and 

9 ‘‘(D) the extent to which supervised finan10 cial institutions are engaging in sound climate 

11 risk management; and 

12 ‘‘(E) the degree of coordination among 

13 Federal and State financial regulatory agencies 

14 on climate risk; and 

15 ‘‘(F) the degree of coordination by Federal 

16 and State financial regulatory agencies with 

17 international financial regulatory authorities on 

18 climate financial risk; and 

19 ‘‘(G) how U.S. climate financial risk disclo20 sure requirements compare to climate financial 

21 risk disclosure regimes in other countries and to 

22 other regimes that are available; and 

23 ‘‘(H) any other areas the Council believes 

24 are important; and 


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1 ‘‘(2) provides recommendations based on the as2 sessments in paragraph (1) to Federal and State fi3 nancial regulatory agencies and to Congress on how 

4 to improve the ability of the financial regulatory sys5 tem in the United States to identify and mitigate cli6 mate financial risk. 

7 ‘‘(f) MEMBER AGENCIES.—Each member agency 

8 should develop and make publicly available a strategy to 

9 identify and mitigate climate financial risk within the ju10 risdiction of the member agency. 

11 ‘‘(g) COORDINATION.—The Council should— 

12 ‘‘(1) facilitate the sharing of best practices on 

13 climate financial risk across agencies; and 

14 ‘‘(2) assign the Office of Financial Research to 

15 conduct ongoing research into climate financial risk. 

16 ‘‘(h) INCLUSION IN ANNUAL REPORT.—The Council 

17 shall include a section on climate financial risk in— 

18 ‘‘(1) the annual report of the Council to Con19 gress; and 

20 ‘‘(2) if relevant, in any other report to Con21 gress.’’. 

22 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

23 The table of contents of the Dodd-Frank Wall Street Re24 form and Consumer Protection Act in section 1(b) of that 


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1 Act is amended by inserting after the item relating to sec2 tion 121 the following: 

‘‘Sec. 121A. Advisory Committee on Climate Risk.’’. 

3 SEC. 3. UPDATE ON SUPERVISORY GUIDANCE ON CLIMATE 

4 RISK. 

5 (a) DEFINITION.—In this section, the term ‘‘Federal 

6 banking agency’’ has the meaning given the term in sec7 tion 2 of the Dodd-Frank Wall Street Reform and Con8 sumer Protection Act (12 U.S.C. 5301). 

9 (b) UPDATE.—Each Federal banking agency and the 

10 National Credit Union Administration shall update appli11 cable supervisory guidance to include climate risk, includ12 ing credit, liquidity, market, operational, and reputational 

13 risk to ensure that supervised financial institutions appro14 priately identify and mitigate climate financial risk. 

15 (c) COORDINATION.—The Federal Financial Institu16 tions Examination Council shall ensure that the guidance 

17 updated under subsection (b) is— 

18 (1) appropriately coordinated among the Fed19 eral banking agencies and the National Credit Union 

20 Administration; and 

21 (2) shared with State regulators. 

22 SEC. 4. UPDATE NONBANK SIFI DESIGNATION GUIDANCE. 

23 The Financial Stability Oversight Council shall up24 date subpart B of part 1310 of title 12, Code of Federal 


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1 Regulations, to specify how the Council will incorporate 

2 climate risk into determinations described in that subpart. 

3 SEC. 5. FIO REPORT ON INSURANCE REGULATION AND CLI4 MATE RISK. 

5 Not later than 1 year after the date of enactment 

6 of this Act, the Federal Insurance Office shall publish a 

7 report that— 

8 (1) assesses the potential impact of climate fi9 nancial risk on the insurance sector in the United 

10 States; and 

11 (2) recommends ways to modernize and improve 

12 the system of climate risk insurance regulation in 

13 the United States. 

14 SEC. 6. IMPROVE GLOBAL COORDINATION. 

15 It is the sense of Congress that relevant Federal fi16 nancial regulatory agencies and the Department of the 

17 Treasury, if relevant, should— 

18 (1) join the Network for Greening the Financial 

19 System and other international organizations fo20 cused on climate financial risk; 

21 (2) formally join the Task Force on Climate22 Related Financial Risks of the Basel Committee on 

23 Banking Supervision; and 


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1 (3) work with international regulators on cli2 mate financial risk whenever possible, consistent 

3 with United States law. 

Æ 


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