Global banking regulators have pledged to step up efforts to understand the financial risks posed by climate change, even as the United States retreats from international climate initiatives under President Donald Trump.
The oversight body of the Basel Committee on Banking Supervision, which includes central bank governors and heads of supervision, met on Monday to review progress on climate-related financial risk assessments. In a statement released by the Bank for International Settlements (BIS), the group agreed to prioritise efforts to evaluate the financial impact of extreme weather events.
The move reflects a growing divide in global regulatory approaches. While European and British regulators continue to embed climate considerations into financial oversight, including the European Central Bank’s prioritisation of climate risk management, US authorities have reversed course.
Under the Trump administration, American officials have rolled back several climate-linked financial policies. In January, the Federal Reserve withdrew from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), a global coalition promoting climate risk oversight. Additionally, the Office of the Comptroller of the Currency abandoned a jointly developed climate risk framework in March, describing it as “overly burdensome.”
Legal analysts now anticipate that the Federal Deposit Insurance Corporation and the Federal Reserve will formally withdraw from the joint climate principles in the coming months.
Despite lacking enforcement powers, the Basel Committee plays a key role in shaping international banking norms. Its forthcoming voluntary disclosure framework on climate-related financial risks is expected to serve as a reference for national regulators.
