Regional banks join forces to tackle climate change

Two months after forming a consortium of large, international banks to address the risks associated with climate change, the Risk Management Association has established a similar group for midsize banks.

The RMA Regional Bank Climate Risk Consortium has launched with five members, including Zions Bancorp. in Salt Lake City, Utah, and Webster Financial in Stamford, Connecticut, RMA announced Wednesday in a press release. Like its counterpart for larger banks, the regional bank consortium will assist banks in creating guidelines for integrating climate risk management into their operations and prepare them to help steer the economy toward a low-carbon future.

“By developing climate risk management resources and practices, RMA’s consortia are helping financial institutions maintain strength and resilience to carry out their crucial economic role,” said Nancy Foster, president and chief executive of the Philadelphia-based RMA, which is a membership organization for risk professionals in the financial industry.

Adobe stock

RMA did not identify the three other banks in the regional bank consortium. The addition of more banks will depend on their interest in joining, Fran Garritt, RMA’s director of securities lending and market risk, said in an email.

Meanwhile, the original group — the RMA Climate Risk Consortium — keeps growing. It now has 28 members, according to the release, up from 19 when the group was announced in January.

New additions include Ally Financial in Detroit, Bank of Montreal, France’s Société Générale, Japan’s Sumitomo Mitsui Banking Corp. and TD Bank Group in Toronto, RMA said.

They join a group of large and regional banks that includes Bank of America, Wells Fargo, U.S. Bancorp, Truist Financial, Fifth Third Bancorp, KeyCorp, Huntington Bancshares, Regions Financial, M&T Bank, Silicon Valley Bank, MUFG Union Bank, Royal Bank of Canada and National Bank of Canada.

The remaining 10 banks have not been publicly identified.

The consortium has identified three priority areas — governance, scenario analysis and data quality, the release said. Members of the group will be focused on “developing frameworks and standards for strategy, policy and enterprise risk challenges; addressing issues related to the impact of scenario analysis on credit analytics and underwriting; and enabling banks to have climate competent, data-driven conversations” with customers, the release said.

The RMA initiatives are coming at a time when banks are grappling with the impact of a warming planet on their operations and facing growing pressure from environmental groups and activist shareholders to do more to combat climate change.

On Monday, the Securities and Exchange Commission proposed a rule that would require publicly traded companies, including banks, to disclose their greenhouse gas emissions and other risks tied to climate change.