I 
116TH CONGRESS 
1ST SESSION H. R. 5194 
To require the Board of Governors of the Federal Reserve System, in con-
sultation with the heads of other relevant Federal agencies, to develop 
financial risk analyses relating to climate change, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 20, 2019 
Mr. CASTEN of Illinois (for himself, Ms. WILD, Mr. TONKO, Ms. BROWNLEY 
of California, Ms. BONAMICI, Mr. KENNEDY, and Mr. PETERS) intro-
duced the following bill; which was referred to the Committee on Finan-
cial Services, and in addition to the Committee on Energy and Com-
merce, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To require the Board of Governors of the Federal Reserve 
System, in consultation with the heads of other relevant 
Federal agencies, to develop financial risk analyses relat-
ing to climate change, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Climate Change Finan-
cial Risk Act of 2019’’. 
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SEC. 2. SENSE OF CONGRESS. 
It is the sense of Congress that— 
(1) if current trends continue, average global 
temperatures are likely to reach 1.5 degrees Celsius 
above pre-industrial levels between 2030 and 2050; 
(2) global temperature rise has already resulted 
in an increased number of heavy rainstorms, coastal 
flooding events, heat waves, wildfires, and other ex-
treme events; 
(3) since 1980— 
(A) the number of extreme weather events 
per year that cost the people of the United 
States more than $1,000,000,000 per event, ac-
counting for inflation, has increased signifi-
cantly; and 
(B) the total cost of extreme weather 
events in the United States has exceeded 
$1,100,000,000,000; 
(4) as physical impacts from climate change are 
manifested across multiple sectors of the economy of 
the United States— 
(A) climate-related economic risks will con-
tinue to increase; 
(B) climate-related extreme weather events 
will disrupt energy and transportation systems 
in the United States, which will result in more 
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frequent and longer-lasting power outages, fuel 
shortages, and service disruptions in critical 
sectors across the economy of the United 
States; 
(C) projected increases in extreme heat 
conditions will lead to decreases in labor pro-
ductivity in agriculture, construction, and other 
critical economic sectors; 
(D) food and livestock production will be 
impacted in regions that experience increases in 
heat and drought and small rural communities 
will struggle to find the resources needed to 
adapt to those changes; and 
(E) sea level rise and more frequent and 
intense extreme weather events will— 
(i) increasingly disrupt and damage 
private property and critical infrastructure; 
and 
(ii) drastically increase insured and 
uninsured losses; 
(5) advances in energy efficiency and renewable 
energy technologies, as well as climate policies and 
shifting societal preferences, will— 
(A) reduce global demand for fossil fuels; 
and 
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(B) expose transition risks for fossil fuel 
companies and investors, which could include 
trillions of dollars of stranded assets around the 
world; 
(6) climate change poses uniquely far-reaching 
risks to the financial services industry, including 
with respect to underwriting, credit, and market 
risks, due to the number of sectors and locations im-
pacted and the potentially irreversible scale of dam-
age; 
(7) financial institutions must take a consistent 
approach to assessing climate-related financial risks 
and incorporating those risks into existing risk man-
agement practices, which should be informed by sce-
nario analysis; 
(8) the Board of Governors conducts annual as-
sessments of the capital adequacy and capital plan-
ning practices of the largest and most complex bank-
ing organizations (referred to in this section as 
‘‘stress tests’’) in order to promote a safe, sound, 
and efficient banking and financial system; 
(9) as of the date of enactment of this Act, the 
stress tests conducted by the Board of Governors are 
not designed to reflect the physical risks or transi-
tion risks posed by climate change; and 
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(10) the Board of Governors— 
(A) has the authority to take into account 
the potentially systemic impact of climate-re-
lated risks on the financial system; and 
(B) should develop new analytical tools 
with longer time horizons to accurately assess 
and manage the risks described in subpara-
graph (A). 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) BANK
HOLDING
COMPANY.—The term 
‘‘bank holding company’’ has the meaning given the 
term in section 102(a) of the Financial Stability Act 
of 2010 (12 U.S.C. 5311(a)). 
(2) BOARD OF GOVERNORS.—The term ‘‘Board 
of Governors’’ means the Board of Governors of the 
Federal Reserve System. 
(3) CLIMATE SCIENCE LEADS.—The term ‘‘cli-
mate science leads’’ means— 
(A) the Administrator of the National Oce-
anic and Atmospheric Administration; 
(B) the Administrator of the Environ-
mental Protection Agency; 
(C) the Secretary of Energy; 
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(D) the Administrator of the National Aer-
onautics and Space Administration; 
(E) the Director of the United States Geo-
logical Survey; 
(F) the Secretary of the Interior; and 
(G) the head of any other Federal agency 
that the Board of Governors determines to be 
appropriate. 
(4) COVERED ENTITY.—The term ‘‘covered en-
tity’’ means— 
(A) a nonbank financial company or bank 
holding company that has not less than 
$250,000,000,000 in total consolidated assets; 
and 
(B) a nonbank financial company or bank 
holding company— 
(i) 
that 
has 
not 
less 
than 
$100,000,000,000 in total consolidated as-
sets; and 
(ii) with respect to which the Board of 
Governors determines the application of 
subparagraph (C) of section 165(i)(1) of 
the Financial Stability Act of 2010 (12 
U.S.C. 5365(i)(1)), as added by section 6 
of this Act, is appropriate— 
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(I) to— 
(aa) prevent or mitigate 
risks to the financial stability of 
the United States; or 
(bb) promote the safety and 
soundness of the company; and 
(II) after taking into consider-
ation— 
(aa) the capital structure, 
riskiness, complexity, financial 
activities, and size of the com-
pany, including the financial ac-
tivities of any subsidiary of the 
company; and 
(bb) any other risk-related 
factor that the Board of Gov-
ernors determines to be appro-
priate. 
(5) NONBANK FINANCIAL COMPANY.—The term 
‘‘nonbank financial company’’ has the meaning given 
the term in section 102(a)(4)(C) of the Financial 
Stability Act of 2010 (12 U.S.C. 5311(a)(4)(C)). 
(6) PHYSICAL
RISKS.—The term ‘‘physical 
risks’’ means financial risks to assets, locations, op-
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erations, or value chains that result from exposure 
to physical climate-related effects, including— 
(A) increased average global temperatures; 
(B) increased severity and frequency of ex-
treme weather events; 
(C) increased flooding; 
(D) sea level rise; 
(E) ocean acidification; 
(F) increased severity and frequency of 
heat waves; 
(G) increased frequency of wildfires; 
(H) decreased arability of farmland; and 
(I) decreased availability of fresh water. 
(7) TECHNICAL
DEVELOPMENT
GROUP.—The 
term ‘‘Technical Development Group’’ means the 
Climate Risk Scenario Technical Development Group 
established under section 4. 
(8) TRANSITION RISKS.—The term ‘‘transition 
risks’’ means financial risks that are attributable to 
climate change mitigation and adaptation, including 
efforts to reduce greenhouse gas emissions and 
strengthen resilience to the impacts of climate 
change, including— 
(A) costs relating to— 
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(i) international treaties and agree-
ments; 
(ii) Federal, State, and local policies; 
(iii) new technologies; 
(iv) changing markets; 
(v) reputational impacts relevant to 
changing consumer behavior; and 
(vi) litigation; and 
(B) a loss in the value, or the stranding, 
of assets due to any of the costs described in 
clauses (i) through (vi) of subparagraph (A). 
(9) VALUE CHAIN.—The term ‘‘value chain’’— 
(A) means the total lifecycle of a product 
or service, both before and after production of 
the product or service, as applicable; and 
(B) may include the sourcing of materials, 
production, and disposal with respect to the 
product or service described in subparagraph 
(A). 
SEC. 4. CLIMATE RISK SCENARIO TECHNICAL DEVELOP-
MENT GROUP. 
(a) ESTABLISHMENT.—The Board of Governors shall 
establish a technical advisory group to be known as the 
Climate Risk Scenario Technical Development Group. 
(b) MEMBERSHIP.— 
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(1) COMPOSITION.—The Technical Develop-
ment Group shall be composed of 10 members— 
(A) 5 of whom shall be climate scientists; 
and 
(B) 5 of whom shall be economists, with 
expertise in either the United States financial 
system or the risks posed by climate change. 
(2) SELECTION.—The Board of Governors shall 
select the members of the Technical Development 
Group after consultation with the climate science 
leads. 
(c) DUTIES.—The Technical Development Group 
shall— 
(1) provide recommendations to the Board of 
Governors regarding the development of, and up-
dates to, the climate change risk scenarios under 
section 5; 
(2) after the establishment of the climate 
change risk scenarios under section 5, determine the 
financial and economic risks resulting from those 
scenarios; 
(3) make any final work product and any data 
sets or other inputs used in the development of the 
final work product, publicly available; and 
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(4) provide technical assistance to covered enti-
ties on assessing physical risks or transition risks. 
(d) INAPPLICABILITY OF FEDERAL ADVISORY COM-
MITTEE ACT.—The Federal Advisory Committee Act (5 
U.S.C. App.) shall not apply with respect to the Technical 
Development Group. 
SEC. 5. DEVELOPMENT AND UPDATING OF CLIMATE 
CHANGE RISK SCENARIOS. 
(a) IN GENERAL.— 
(1) INITIAL DEVELOPMENT.—Not later than 1 
year after the date of enactment of this Act, the 
Board of Governors, in coordination with the climate 
science leads, and taking into consideration the rec-
ommendations of the Technical Development Group, 
shall develop 3 separate climate change risk sce-
narios as follows: 
(A) One scenario that assumes an average 
increase in global temperatures of 1.5 degrees 
Celsius above pre-industrial levels. 
(B) One scenario that assumes an average 
increase in global temperatures of 2 degrees 
Celsius above pre-industrial levels. 
(C) One scenario that— 
(i) assumes the likely and very likely 
average increase in global temperatures 
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that can be expected, taking into consider-
ation the extent to which national policies 
and actions relating to climate change have 
been implemented, as of the date on which 
the scenario is developed, or on which the 
scenario is updated under paragraph (2), 
as applicable; and 
(ii) does not take into consideration 
commitments for policies and actions relat-
ing to climate change that, as of the appli-
cable date described in clause (i), have not 
been implemented. 
(2) UPDATES.—After the initial development of 
the climate change risk scenarios under paragraph 
(1), the Board of Governors, in coordination with 
the climate science leads, and taking into consider-
ation the recommendations of the Technical Devel-
opment Group, shall update those scenarios once 
every 3 years. 
(3) INTERNATIONAL COORDINATION.—In devel-
oping and updating the 3 scenarios required under 
this subsection, the Board of Governors shall take 
into consideration analytic tools and best practices 
developed by international banking supervisors relat-
ing to climate risks and scenario analysis in an ef-
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