Consortium for Large Banks Grows, Includes Ally Bank, BMO Financial Group, Societe Generale, Sumitomo Mitsui Banking Corporation (SMBC), TD Bank Group
The Risk Management Association announced it has strengthened its commitment to advance climate risk management in the financial industry by forming the RMA Regional Bank Climate Risk Consortium. It also has added a number of large, international banks to the RMA Climate Risk Consortium officially launched in January.
Both consortia will focus on bringing financial institutions together to create guidelines for embedding climate in risk management practices throughout the three lines of defense and preparing the industry to help economies transition to a low-carbon future.
The large bank consortium has grown to an international group of 28 members, and now includes Ally Bank, BMO Financial Group, Societe Generale, Sumitomo Mitsui Banking Corporation (SMBC), and TD Bank Group. The regional bank consortium is launching with five members, including Webster Bank and Zions Bancorporation.
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“At Webster, we are dedicated to being a responsible corporate citizen, including proactively managing risk around climate change,” said Chief Credit Officer Jason Soto. “We look forward to joining our fellow financial services organizations in working with the RMA Regional Bank Climate Risk Consortium as it defines strategies and measurable outcomes within our region.”
As the regional bank consortium gets started, the consortium for larger institutions has prioritized three topics, with working groups covering governance, scenario analysis, and data quality. Respectively, their charge includes 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 clients.
“The RMA Climate Risk Consortium has come together at a critical juncture for the banking industry as it grapples with a multitude of risks while being presented opportunities from the evolving climate and net zero commitments. This has been an exciting opportunity to work with our consortium members to better understand the range of challenges, pool our intellectual resources, and develop industry best practices for shared issues related to climate risk,” said Chief Risk Officer of SMBC Americas Division Kim Olson, whose firm joined the consortium in January.
The climate consortia activity comes as the UN Intergovernmental Panel on Climate Change warns in a landmark report that climate change is occurring more rapidly and causing more severe impacts than anticipated.
“The IPCC report is a stark reminder that action is needed now to mitigate and respond to the profound challenges brought by a warming climate,” RMA President and CEO Nancy Foster said. “A financial industry that is proactively addressing this transition is critical and we are committed to helping the industry through education and community.
“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,” Foster said.
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Previously announced members of the consortia include:
- Bank of America
- Bank of the West
- Fifth Third Bank
- Huntington Bank
- KeyBank
- M&T Bank Corp.
- MUFG Union Bank
- National Bank of Canada
- Regions Bank
- Royal Bank of Canada
- Silicon Valley Bank, and its parent, SVB Financial Group
- Truist
- U.S. Bank
- Wells Fargo
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