II 

117TH CONGRESS 

1ST SESSION S. 588 

To establish the Advisory Committee on Climate Risk on the Financial 

Stability Oversight Council. 

IN THE SENATE OF THE UNITED STATES 

MARCH 4, 2021 

Mrs. FEINSTEIN (for herself, Ms. CORTEZ MASTO, Mr. PADILLA, Mr. SCHATZ, 

Ms. WARREN, Mr. HEINRICH, and Mr. MERKLEY) 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 2021’’. 

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 


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1 by inserting after section 121 (12 U.S.C. 5331) the fol2 lowing: 

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

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

5 Council the Climate Risk Advisory Committee, which 

6 shall— 

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

8 the Council of an annual report on climate risk re9 quired under subsection (e) and other climate risk 

10 matters; and 

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

12 than once per year. 

13 ‘‘(b) MEMBERSHIP.— 

14 ‘‘(1) IN GENERAL.—The Committee shall con15 sist of the following members: 

16 ‘‘(A) Four members who are climate 

17 science experts, of whom— 

18 ‘‘(i) 1 shall be appointed by the Sec19 retary of Energy; 

20 ‘‘(ii) 1 shall be appointed by the Ad21 ministrator of the Environmental Protec22 tion Agency; and 

23 ‘‘(iii) 2 shall be appointed by the Di24 rector of the National Science Foundation. 


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

2 climate economics or climate financial risk ap3 pointed by the Council, of whom not fewer than 

4 1 member is each an expert in— 

5 ‘‘(i) insurance; 

6 ‘‘(ii) capital markets; 

7 ‘‘(iii) banking; 

8 ‘‘(iv) international financial markets; 

9 ‘‘(v) housing; and 

10 ‘‘(vi) the perspective of asset owners. 

11 ‘‘(2) PROHIBITION.—No member of the Com12 mittee may be employed by a company within the ju13 risdiction of a member agency of the Council. 

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

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

16 of the first members of the Committee shall be staggered 

17 so that— 

18 ‘‘(1) 4 members serve terms of 3 years; 

19 ‘‘(2) 4 members serve terms of 2 years; and 

20 ‘‘(3) 4 members serve terms of 1 years. 

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

22 with the Committee in carrying out the requirements of 

23 this section. 

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

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


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1 section, the Council shall, in coordination with the Com2 mittee and the Deputies Committee of the Council, publish 

3 a report that— 

4 ‘‘(1) assesses— 

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

6 on the financial stability of the United States; 

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

8 State financial regulatory agencies have suffi9 cient expertise on climate risk; 

10 ‘‘(C) the quality of data available to Coun11 cil members to properly assess climate financial 

12 risk and any gaps in data that exist; 

13 ‘‘(D) the extent to which supervised finan14 cial institutions are engaging in sound climate 

15 risk management; 

16 ‘‘(E) the degree of coordination among 

17 Federal and State financial regulatory agencies 

18 on climate risk; 

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

20 and State financial regulatory agencies with 

21 international financial regulatory authorities on 

22 climate financial risk; 

23 ‘‘(G) how U.S. climate financial risk disclo24 sure requirements compare to climate financial 


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1 risk disclosure regimes in other countries and to 

2 other regimes that are available; and 

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

4 are important; and 

5 ‘‘(2) provides recommendations based on the as6 sessments in paragraph (1) to Federal and State fi7 nancial regulatory agencies and to Congress on how 

8 to improve the ability of the financial regulatory sys9 tem in the United States to identify and mitigate cli10 mate financial risk. 

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

12 should develop and make publicly available a strategy to 

13 identify and mitigate climate financial risk within the ju14 risdiction of the member agency. 

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

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

17 climate financial risk across agencies; and 

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

19 conduct ongoing research into climate financial risk. 

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

21 shall include a section on climate financial risk in— 

22 ‘‘(1) the annual report of the Council to Con23 gress; and 

24 ‘‘(2) if relevant, in any other report to Con25 gress.’’. 


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1 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

2 The table of contents of the Dodd-Frank Wall Street Re3 form and Consumer Protection Act in section 1(b) of that 

4 Act is amended by inserting after the item relating to sec5 tion 121 the following: 

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

6 SEC. 3. UPDATE ON SUPERVISORY GUIDANCE ON CLIMATE 

7 RISK. 

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

9 banking agency’’ has the meaning given the term in sec10 tion 2 of the Dodd-Frank Wall Street Reform and Con11 sumer Protection Act (12 U.S.C. 5301). 

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

13 National Credit Union Administration shall update appli14 cable supervisory guidance to include climate risk, includ15 ing credit, liquidity, market, operational, and reputational 

16 risk to ensure that supervised financial institutions appro17 priately identify and mitigate climate financial risk. 

18 (c) COORDINATION.—The Federal Financial Institu19 tions Examination Council shall ensure that the guidance 

20 updated under subsection (b) is— 

21 (1) appropriately coordinated among the Fed22 eral banking agencies and the National Credit Union 

23 Administration; and 

24 (2) shared with State regulators. 


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1 SEC. 4. UPDATE NONBANK SIFI DESIGNATION GUIDANCE. 

2 The Financial Stability Oversight Council shall up3 date subpart B of part 1310 of title 12, Code of Federal 

4 Regulations, to specify how the Council will incorporate 

5 climate risk into determinations described in that subpart. 

6 SEC. 5. FIO REPORT ON INSURANCE REGULATION AND CLI7 MATE RISK. 

8 Not later than 1 year after the date of enactment 

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

10 report that— 

11 (1) assesses the potential impact of climate fi12 nancial risk on the insurance sector in the United 

13 States; and 

14 (2) recommends ways to modernize and improve 

15 the system of climate risk insurance regulation in 

16 the United States. 

17 SEC. 6. IMPROVE GLOBAL COORDINATION. 

18 It is the sense of Congress that relevant Federal fi19 nancial regulatory agencies and the Department of the 

20 Treasury, if relevant, should— 

21 (1) join the Network for Greening the Financial 

22 System and other international organizations fo23 cused on climate financial risk; 

24 (2) formally join the Task Force on Climate25 Related Financial Risks of the Basel Committee on 

26 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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