Climate Stress Tests Are a Great Opportunity for Investors

The majority of banks are not yet taking climate into account when they assess the credit risk of their portfolios. The Federal Reserve has not made any concrete requirements over how banks should report or manage their climate risks. For now, institutions like the Fed are testing out the waters through requests for information and opening the door for comment. But at some point, a regulator may have to draw a line in the sand on what constitutes reasonable risk mitigation actually looks like.