(Bloomberg) — The Federal Reserve has ended its program that required the biggest US banks to submit data for climate stress tests, according to people familiar with the matter.
JPMorgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc. and three other lenders won’t be asked to provide information for the Fed’s Climate Scenario Analysis Exercise, the people said, asking not to be identified because they’re not authorized to speak publicly on the subject. The Fed conducted the scenario analysis as a pilot program in 2023 and published the results last year for the first time.
The climate stress exercise didn’t have consequences for bank capital or supervisory implications. Instead, the tests were intended to aid the largest US lenders, which also included Bank of America Corp., Wells Fargo & Co. and Morgan Stanley, and their supervisors in identifying and managing climate-related financial risks.
A spokesperson for the Fed declined to comment.
It’s the latest blow to climate finance in the US, as President Donald Trump takes a sledge hammer to green policies embraced by his predecessor. The decision to shelve US bank climate stress tests follows the Fed’s withdrawal from the Network of Central Banks and Supervisors for Greening the Financial System, a decision that was announced days before Trump’s inauguration. Additionally, all six of the largest US banks have withdrawn from the industry’s main climate-finance group: the Net-Zero Banking Alliance.
Even before Trump returned to the White House, Fed Chair Jerome Powell had made clear he doesn’t consider climate a policy issue for the US central bank to focus on. That was on display as the Fed sought to block work by the Basel Committee on Banking Supervision that would have pressured global banks to disclose their climate risk, Bloomberg reported in November.
The six biggest US banks participated in a months-long pilot exercise in 2023, designed to measure how climate change can affect the value of their portfolios. Last May, the Fed said the banks complained of significant data gaps and warned of considerable uncertainty as to the reliability of the information being gathered.
The European Central Bank has been conducting climate stress tests since 2022, exposing billions of euros in potential losses faced by lenders that fail to prepare for the fallout of a hotter planet. The ECB has since said it is ready to impose financial penalties on banks that don’t address such risks adequately.
The Bank of England started its first major review of the resilience of its finance industry to the fallout of climate change back in 2021. The BOE initially intended to start the exercise a year earlier, but was forced to delay the plans due to the pandemic.
(Adds reference to Net-Zero Banking Alliance in sixth paragraph.)
More stories like this are available on bloomberg.com
©2025 Bloomberg L.P.
