Principles for Climate-Related Financial Risk Management for Large Financial Institutions
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FDIC Financial Institution Letters › Principles for Climate-Related Financial Risk Management for Large Financial Institutions
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74183
Federal Register / Vol. 88, No. 208 / Monday, October 30, 2023 / Notices
1 OCC Bulletin 2021–62, Risk Management:
Principles for Climate-Related Financial Risk
Management for Large Banks; Request for Feedback,
(December 16, 2021), https://occ.gov/news-
issuances/bulletins/2021/bulletin-2021-62.html.
2 87 FR 19507 (April 4, 2022).
3 87 FR 75267 (December 8, 2022).
4 Physical risks refer to the harm to people and
property arising from acute, climate-related events,
such as hurricanes, wildfires, floods, and
heatwaves, and chronic shifts in climate, including
higher average temperatures, changes in
precipitation patterns, sea level rise, and ocean
acidification. Transition risks refer to stresses to
institutions or sectors arising from the shifts in
policy, consumer and business sentiment, or
technologies associated with the changes that
would be part of a transition to a lower carbon
economy.
Washington, DC 20551–0001, not later
than November 27, 2023.
A. Federal Reserve Bank of Boston
(Prabal Chakrabarti, Senior Vice
President) 600 Atlantic Avenue, Boston,
Massachusetts 02210–2204. Comments
can also be sent electronically to
BOS.SRC.Applications.Comments@
bos.frb.org:
1. 1864 Bancorp, MHC, and 1864
Bancorp, Inc., both of South Easton,
Massachusetts; to become bank holding
companies by acquiring all of the voting
shares of North Easton Savings Bank,
South Easton, Massachusetts.
B. Federal Reserve Bank of Dallas
(Karen Smith, Director, Mergers &
Acquisitions) 2200 North Pearl Street,
Dallas, Texas 75201–2272. Comments
can also be sent electronically to
Comments.applications@dal.frb.org:
1. The 2013 Monte Hulse Family
Irrevocable Trust I, Waco, Texas; to
acquire up to 30 percent of the voting
shares of FCT Bancshares, Inc., Waco,
Texas, and thereby indirectly acquire
voting shares of First National Bank of
Central Texas, Waco, Texas.
C
tions) 2200 North Pearl Street,
Dallas, Texas 75201–2272. Comments
can also be sent electronically to
Comments.applications@dal.frb.org:
1. The 2013 Monte Hulse Family
Irrevocable Trust I, Waco, Texas; to
acquire up to 30 percent of the voting
shares of FCT Bancshares, Inc., Waco,
Texas, and thereby indirectly acquire
voting shares of First National Bank of
Central Texas, Waco, Texas.
C. Federal Reserve Bank of San
Francisco (Joseph Cuenco, Assistant
Vice President, Formations,
Transactions & Enforcement) 101
Market Street, San Francisco, California
94105. Comments can also be sent
electronically to: sf.fisc.comments
.applications@sf.frb.org.
1. WAFD, Inc., Seattle, Washington; to
acquire Luther Burbank Corporation,
and thereby indirectly acquire Luther
Burbank Savings, both of Santa Rosa,
California.
Board of Governors of the Federal Reserve
System.
Michele Taylor Fennell,
Deputy Associate Secretary of the Board.
[FR Doc. 2023–23912 Filed 10–27–23; 8:45 am]
BILLING CODE P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
[Docket ID OCC–2022–0023]
FEDERAL RESERVE SYSTEM
[Docket No. OP–1793]
FEDERAL DEPOSIT INSURANCE
CORPORATION
RIN 3064–ZA32
Principles for Climate-Related
Financial Risk Management for Large
Financial Institutions
AGENCY: Office of the Comptroller of the
Currency (OCC), Treasury; Board of
Governors of the Federal Reserve
System (Board); and Federal Deposit
Insurance Corporation (FDIC).
ACTION: Final interagency guidance.
SUMMARY: The OCC, Board, and FDIC
(together, the agencies) are jointly
issuing principles that provide a high-
level framework for the safe and sound
management of exposures to climate-
related financial risks (principles).
Although all financial institutions,
regardless of size, may have material
exposures to climate-related financial
risks, these principles are intended for
the largest financial institutions, those
with over $100 billion in total
consolidated assets
nciples that provide a high-
level framework for the safe and sound
management of exposures to climate-
related financial risks (principles).
Although all financial institutions,
regardless of size, may have material
exposures to climate-related financial
risks, these principles are intended for
the largest financial institutions, those
with over $100 billion in total
consolidated assets. The principles are
intended to support efforts by large
financial institutions to focus on key
aspects of climate-related financial risk
management.
DATES: The final interagency guidance is
available on October 30, 2023.
FOR FURTHER INFORMATION CONTACT:
OCC: Tamara Culler, Director for
Governance and Operational Risk
Policy, Bank Supervision Policy, at
(202) 649–6670, Russell D’Costa,
Program Analyst, Office of Climate Risk,
at (202) 649–8283, or Alison
MacDonald, Senior Counsel, Chief
Counsel’s Office, at (202) 649–5490,
Office of the Comptroller of the
Currency, 400 7th Street SW,
Washington, DC 20219. If you are deaf,
hard of hearing, or have a speech
disability, please dial 7–1–1 to access
telecommunications relay services.
Board: Anna Lee Hewko, Associate
Director, (202) 530–6260; Morgan Lewis,
Manager, (202) 452–2000; or Matthew
McQueeney, Senior Financial
Institution Policy Analyst II, (202) 452–
2942 Division of Banking Supervision
and Regulation; or Asad Kudiya,
Assistant General Counsel, (202) 475–
6358; Flora Ahn, Senior Special
Counsel, (202) 452–2317; Matthew
Suntag, Senior Counsel, (202) 452–3694;
Katherine Di Lucido, Attorney, (202)
452–2352; or David Imhoff, Attorney,
nager, (202) 452–2000; or Matthew
McQueeney, Senior Financial
Institution Policy Analyst II, (202) 452–
2942 Division of Banking Supervision
and Regulation; or Asad Kudiya,
Assistant General Counsel, (202) 475–
6358; Flora Ahn, Senior Special
Counsel, (202) 452–2317; Matthew
Suntag, Senior Counsel, (202) 452–3694;
Katherine Di Lucido, Attorney, (202)
452–2352; or David Imhoff, Attorney,
(202) 452–2249, Legal Division, Board of
Governors of the Federal Reserve
System, 20th and C Streets NW,
Washington, DC 20551. For the hearing
impaired and users of TTY–TRS, please
call 711 from any telephone, anywhere
in the United States.
FDIC: Andrew D. Carayiannis, Chief,
Policy and Risk Analytics Section,
acarayiannis@fdic.gov; Lauren K.
Brown, Senior Policy Analyst, Exam
Support Section, laubrown@fdic.gov;
Amy L. Beck, Corporate Expert,
Sustainable Finance, ambeck@fdic.gov;
Capital Markets and Accounting Policy,
Division of Risk Management
Supervision, 202–898–6888; Jennifer M.
Jones, Counsel, jennjones@fdic.gov;
Karlyn Hunter, Counsel, kahunter@
fdic.gov; Amanda Ledig, Senior
Attorney, aledig@fdic.gov; Supervision,
Legislation, and Enforcement Branch,
Legal Division, Federal Deposit
Insurance Corporation, 550 17th Street
NW, Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Background
On December 16, 2021, the OCC
issued draft Principles for Climate-
Related Financial Risk Management for
Large Banks (OCC draft principles) and
requested feedback from the public with
comments due on February 14, 2022.1
On April 4, 2022, the FDIC issued a
Request for Comment on a Statement of
Principles for Climate-Related Financial
Risk Management for Large Financial
Institutions (FDIC draft principles) with
comments due on June 3, 2022.2 On
December 2, 2022, the Board issued
draft Principles for Climate-Related
Financial Risk Management for Large
Financial Institutions (Board draft
principles) with comments due on
February 6, 2023.3
Financial institutions are likely to be
affected by
or Climate-Related Financial
Risk Management for Large Financial
Institutions (FDIC draft principles) with
comments due on June 3, 2022.2 On
December 2, 2022, the Board issued
draft Principles for Climate-Related
Financial Risk Management for Large
Financial Institutions (Board draft
principles) with comments due on
February 6, 2023.3
Financial institutions are likely to be
affected by both the physical risks and
transition risks associated with climate
change (collectively, climate-related
financial risks).4 Weaknesses in how
financial institutions identify, measure,
monitor, and control climate-related
financial risks could adversely affect
financial institutions’ safety and
soundness. The proposed OCC draft
principles, FDIC draft principles, and
Board draft principles (collectively,
draft principles) were substantively
similar and proposed a high-level
framework for the safe and sound
management of exposures to climate-
related financial risks, consistent with
the risk management framework
described in the agencies’ existing rules
and guidance. Although all financial
institutions, regardless of size, may have
material exposures to climate-related
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5 The Board is responsible for the overall
supervision and regulation of the U.S. operations of
all foreign banking organizations. The OCC, the
FDIC, and the state banking authorities have
supervisory authority over the national and state
bank subsidiaries and federal and state branches
and agencies of foreign banking organizations,
respectively, in addition to the Board’s supervisory
and regulatory responsibilities over some of these
entities
and regulation of the U.S. operations of
all foreign banking organizations. The OCC, the
FDIC, and the state banking authorities have
supervisory authority over the national and state
bank subsidiaries and federal and state branches
and agencies of foreign banking organizations,
respectively, in addition to the Board’s supervisory
and regulatory responsibilities over some of these
entities.
financial risks, the draft principles were
intended to support key climate-related
financial risk management efforts by the
largest financial institutions, those with
over $100 billion in total consolidated
assets.
The agencies seek to promote
consistency in their climate-related
financial risk management guidance.
Accordingly, following the issuance of
the draft principles and collective
review of comments received on each of
the OCC draft principles, FDIC draft
principles, and Board draft principles,
the agencies are now jointly issuing
final interagency Principles for Climate-
Related Financial Risk Management for
Large Financial Institutions (principles)
that provide a high-level framework for
the safe and sound management of
exposures to climate-related financial
risks.
II. Discussion of Public Comments
The OCC received nearly 100 unique
comments on the OCC draft principles
from individuals and organizations.
Several of these letters were signed by
or included individual feedback from
multiple individuals or organizations
(and in one case, more than 17,700
individuals). Approximately 4,470
individuals submitted a substantially
similar letter directly to the OCC.
The FDIC received more than 70
unique comments on the FDIC draft
principles from individuals and
organizations. Several of the letters were
submitted on behalf of, or signed by,
numerous individuals and
organizations.
The Board received more than 100
unique comments on the Board draft
principles from individuals and
organizations
tted a substantially
similar letter directly to the OCC.
The FDIC received more than 70
unique comments on the FDIC draft
principles from individuals and
organizations. Several of the letters were
submitted on behalf of, or signed by,
numerous individuals and
organizations.
The Board received more than 100
unique comments on the Board draft
principles from individuals and
organizations. Several of the letters were
submitted on behalf of, or signed by,
numerous individuals or organizations.
Commenters included financial
services trade groups, individual banks,
environmental groups, public interest
and advocacy groups, data and risk
model providers, governmental
organizations, community groups, and
individuals, among other respondents.
The agencies received a wide range of
comments that both supported and
opposed the finalization of the draft
principles. Many commenters viewed
the draft principles as an important step
to support large financial institutions in
managing climate-related financial risks.
Other commenters asserted that
financial institutions already effectively
manage climate-related financial risks or
do not face material climate-related
financial risks. Some commenters
expressed a view that the agencies were
providing special treatment to climate-
related financial risks relative to other
risks. Many commenters indicated
practices to address climate-related
financial risks are evolving, and they
supported the high-level and flexible
nature of the draft principles, while
others encouraged the agencies to take
additional steps to address climate-
related financial risks, including
considering more detailed guidance.
Most unique commenters offered
suggestions for changes to the draft
principles or requested additional
guidance in specific areas. These
comments are summarized below.
Authority. Some commenters asserted
that the draft principles extend beyond
the agencies’ authority
ncies to take
additional steps to address climate-
related financial risks, including
considering more detailed guidance.
Most unique commenters offered
suggestions for changes to the draft
principles or requested additional
guidance in specific areas. These
comments are summarized below.
Authority. Some commenters asserted
that the draft principles extend beyond
the agencies’ authority. Other
commenters raised concerns that the
draft principles would restrict or
discourage provision of credit to, or
otherwise disproportionately impact,
certain industries, geographies, or other
groups. Some commenters asserted that
the draft principles could better address
the role that they believe financial
institutions should play in supporting
or accelerating a transition to a lower
carbon economy.
The agencies are responsible for
ensuring the safety and soundness of
supervised financial institutions, among
other responsibilities. Similar to other
risks faced by financial institutions,
climate-related financial risks can affect
financial institutions’ safety and
soundness. The principles are focused
on ensuring that financial institutions
understand and appropriately manage
their material climate-related financial
risks. The agencies are providing
guidance to financial institutions
through these principles on the
management of climate-related financial
risks just as the agencies provide
guidance to financial institutions in
identifying and managing other risks.
The agencies did not incorporate
suggestions for changes to the draft
principles that extend beyond the
agencies’ statutory mandates relating to
safety and soundness. For example, the
agencies did not incorporate changes in
response to suggestions that the
agencies promote a transition to a lower
carbon economy
guidance to financial institutions in
identifying and managing other risks.
The agencies did not incorporate
suggestions for changes to the draft
principles that extend beyond the
agencies’ statutory mandates relating to
safety and soundness. For example, the
agencies did not incorporate changes in
response to suggestions that the
agencies promote a transition to a lower
carbon economy. The agencies
encourage financial institutions to take
a risk-based approach in assessing the
climate-related financial risks associated
with their customer relationships and to
take into account the financial
institution’s ability to manage the risk.
The principles neither prohibit nor
discourage financial institutions from
providing banking services to customers
of any specific class or type, as
permitted by law or regulation. The
decision regarding whether to make a
loan or to open, close, or maintain an
account rests with the financial
institution, so long as the financial
institution complies with applicable
laws and regulations.
Scope. Some commenters supported
draft principles that were intended for
financial institutions with total assets
over $100 billion. Other commenters
proposed that the draft principles cover
financial institutions of all sizes. Some
requested that the draft principles be
tailored to financial institutions based
on the size, complexity, or risk profile
of the financial institution. Several
commenters noted that the agencies
should implement a phased-in approach
for smaller financial institutions. Other
commenters expressed concern that the
draft principles could unintentionally
impact smaller financial institutions,
including community banks, noting the
potential burden the principles could
impose on these smaller financial
institutions.
Effective risk management practices
should be appropriate to the size of the
financial institution and the nature,
scope, and risk of its activities
commenters expressed concern that the
draft principles could unintentionally
impact smaller financial institutions,
including community banks, noting the
potential burden the principles could
impose on these smaller financial
institutions.
Effective risk management practices
should be appropriate to the size of the
financial institution and the nature,
scope, and risk of its activities. In
keeping with the agencies’ risk-based
approach to supervision, the principles
are intended for financial institutions
with more than $100 billion in total
consolidated assets. The principles are
intended to provide guidance to large
financial institutions as they develop
strategies, deploy resources, and build
capacity to identify, measure, monitor,
and control for climate-related financial
risks.
Several commenters requested
clarification regarding the draft
principles’ application to foreign
banking organizations and branches and
agencies of foreign banks operating in
the United States. The principles are
intended for foreign banking
organizations with combined United
States operations of greater than $100
billion. The principles also are intended
for any branch or agency of a foreign
banking organization that individually
has total assets of greater than $100
billion.5
Financial institutions’ public climate
commitments. Several commenters
suggested that the draft principles
should encourage or mandate financial
institutions to develop plans to
transition to a lower carbon economy, to
adopt credible commitments to align
their portfolios with net zero
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ts. Several commenters
suggested that the draft principles
should encourage or mandate financial
institutions to develop plans to
transition to a lower carbon economy, to
adopt credible commitments to align
their portfolios with net zero
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6 See 12 CFR part 30, appendix A and appendix
D (OCC); 12 CFR part 364, appendix A (FDIC); 12
CFR part 208, appendix D–1 (Board); and Guidance
on Sound Incentive Compensation Policies, 75 FR
36396 (June 25, 2010).
greenhouse gas emissions by 2050, or to
directly support their customers through
such a transition. Some commenters
asked the agencies to hold financial
institutions accountable if financial
institutions’ public commitments to
address climate change do not match
their actions. Other commenters argued
that the draft principles should
recognize the aspirational nature of
financial institutions’ public
commitments.
The agencies did not incorporate
suggestions for changes to the draft
principles that extend beyond the
agencies’ statutory mandate relating to
safety and soundness, including
changes in response to suggestions that
the agencies promote a transition to a
lower carbon economy. Similar to the
draft principles, the principles state that
any financial institutions’ climate-
related strategies should align with and
support the institution’s broader
strategy, risk appetite, and risk
management framework. In addition,
when financial institutions engage in
public communication of their climate-
related strategies, boards of directors
and management should confirm that
any public statements about their
financial institutions’ climate-related
strategies and commitments are
consistent with their internal strategies,
risk appetite statements, and risk
management frameworks
anagement framework. In addition,
when financial institutions engage in
public communication of their climate-
related strategies, boards of directors
and management should confirm that
any public statements about their
financial institutions’ climate-related
strategies and commitments are
consistent with their internal strategies,
risk appetite statements, and risk
management frameworks. This type of
oversight is consistent with effective
governance and risk management and
intended to help financial institutions
avoid legal and compliance risk.
Low-and-moderate-income (LMI) and
other underserved consumers and
communities. Many commenters asked
that the agencies acknowledge the
potential unintended consequences of
financial institutions’ climate risk
management strategies on low-and-
moderate-income and other underserved
consumers and communities. Some
commenters also requested additional
clarification on how financial
institutions may support communities
that are disproportionately impacted by
the effects of climate change, as well as
additional guidance on how financial
institutions can manage climate-related
financial risks in a manner that
minimizes adverse impacts on such
consumers and communities. Some
commenters also suggested that the
principles should provide further
guidance on how financial institutions
can manage climate-related financial
risks consistent with their obligations
under fair lending and fair housing
laws.
The agencies recognize that both the
effects of climate change and the actions
that financial institutions may take to
manage climate-related financial risks
could potentially have a
disproportionate impact on LMI and
other underserved consumers and
communities
tutions
can manage climate-related financial
risks consistent with their obligations
under fair lending and fair housing
laws.
The agencies recognize that both the
effects of climate change and the actions
that financial institutions may take to
manage climate-related financial risks
could potentially have a
disproportionate impact on LMI and
other underserved consumers and
communities. The agencies expect
financial institutions to manage climate-
related financial risks in a manner that
will allow them to continue to
prudently meet the financial services
needs of their communities, including
LMI and other underserved consumers
and communities, and to ensure
compliance with fair housing and fair
lending laws. For example, the
principles clarify that financial
institutions should ensure that fair
lending monitoring programs review
whether and how the financial
institution’s risk mitigation measures
potentially discriminate against
consumers on a prohibited basis, such
as race, color, or national origin.
Governance. Many commenters
supported the flexibility provided by
the draft principles for financial
institutions to incorporate climate-
related financial risks within existing
organizational structures or to establish
new structures for climate-related
financial risks. Many commenters
requested that the draft principles
further distinguish between the
responsibilities of the boards of
directors and of management. Some
commenters noted that expectations that
financial institutions consider whether
incorporation of climate-related
financial risks into governance and risk
management processes may warrant
changes to compensation policies would
be overly prescriptive.
The agencies have made changes to
the draft principles to clarify the role of
the boards of directors in overseeing the
financial institution’s risk-taking
activities and the role of management in
executing the strategic plan and risk
management framework
nancial risks into governance and risk
management processes may warrant
changes to compensation policies would
be overly prescriptive.
The agencies have made changes to
the draft principles to clarify the role of
the boards of directors in overseeing the
financial institution’s risk-taking
activities and the role of management in
executing the strategic plan and risk
management framework. The agencies
emphasize that sound compensation
programs continue to be important to
promote sound risk management and to
protect the safety and soundness of
financial institutions. As the agencies
have existing guidelines and guidance
on compensation,6 the principles do not
include a specific discussion of
compensation policies.
Materiality of risk. Several
commenters requested further
clarification of how financial
institutions should determine whether
climate-related financial risks are
material. Some commenters requested
clarification that financial institutions
have the flexibility to make their own
materiality determinations. Some
commenters provided specific
recommendations for assessing
materiality. Some commenters
requested that the agencies distinguish
materiality in the context of the draft
principles from the concept of
materiality in securities laws. Other
commenters asserted that climate-
related financial risks are rarely or not
material to the risk profile of financial
institutions.
The principles provide that financial
institutions’ management should
employ comprehensive processes for
identifying climate-related financial
risks consistent with methods used to
identify other types of emerging and
material risks. The agencies made
changes to the draft principles to clarify
that management should incorporate
climate-related financial risks into their
risk management frameworks where
those risks are material.
Coordination. Many commenters
urged the agencies to coordinate
amongst each other and work with other
U.S
consistent with methods used to
identify other types of emerging and
material risks. The agencies made
changes to the draft principles to clarify
that management should incorporate
climate-related financial risks into their
risk management frameworks where
those risks are material.
Coordination. Many commenters
urged the agencies to coordinate
amongst each other and work with other
U.S. and international regulators and
federal agencies to harmonize
approaches and to share knowledge
with respect to climate-related financial
risks.
The agencies agree with commenters
that interagency coordination plays an
important role in the effective issuance
of guidance on climate-related financial
risks. Accordingly, the agencies have
jointly issued these principles and
intend to continue to coordinate with
other U.S. regulators and international
counterparts, where appropriate.
Other comments. The agencies
received a number of detailed comments
on other aspects of the draft principles,
some of which were responsive to
specific questions posed in the draft
principles. These comments included
responses associated with supervisory
approaches, time horizons for
identifying the materiality of climate-
related financial risks, relationships
between climate-related financial risks
and other risks, specific tools and
resources used to manage and mitigate
climate-related financial risks,
approaches to scenario analysis,
climate-related financial products
offered by financial institutions, data-
and modeling-related challenges, and
reporting and disclosure issues. The
responses also included feedback on
how climate-related financial risks
should be considered in merger and
acquisition decisions and the challenges
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itutions, data-
and modeling-related challenges, and
reporting and disclosure issues. The
responses also included feedback on
how climate-related financial risks
should be considered in merger and
acquisition decisions and the challenges
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Federal Register / Vol. 88, No. 208 / Monday, October 30, 2023 / Notices
7 Some commenters also asserted that the draft
principles were legislative rules subject to
Administrative Procedure Act (APA) notice and
comment requirements and that the draft principles
violated the agencies’ rule on guidance. The
principles are being issued as guidance and,
consistent with the agencies’ rule on guidance, they
will not have the force and effect of law. They do
not establish any specific requirements applicable
to financial institutions. Moreover, the principles
are not subject to APA notice and comment
requirements. 5 U.S.C. 533(b) (excluding
interpretive rules, general statements of policy, and
rules of agency organization, procedures, or practice
from the notice and comment requirement). That
the agencies sought public comment on the draft
principles does not mean that the principles are
intended to be a regulation or to have the force and
effect of law. Rather, the comment process helps the
agencies improve their understanding of the issue,
gather information on financial institutions’ risk
management practices, or seek ways to achieve
supervisory objectives most effectively and with the
least burden on financial institutions.
8 5 CFR 1320.3(b)(2).
9 In this issuance, the term ‘‘financial institution’’
or ‘‘institution’’ includes national banks, Federal
savings associations, U.S
ncies improve their understanding of the issue,
gather information on financial institutions’ risk
management practices, or seek ways to achieve
supervisory objectives most effectively and with the
least burden on financial institutions.
8 5 CFR 1320.3(b)(2).
9 In this issuance, the term ‘‘financial institution’’
or ‘‘institution’’ includes national banks, Federal
savings associations, U.S. branches and agencies of
foreign banks, state nonmember banks, state savings
associations, state member banks, bank holding
companies, savings and loan holding companies,
intermediate holding companies, foreign banking
organizations with respect to their U.S. operations,
and non-bank systemically important financial
institutions (SIFIs) supervised by the Board.
10 The Financial Stability Oversight Council has
described the impacts of physical risks as follows:
‘‘The intensity and frequency of extreme weather
and climate-related disaster events are increasing
and already imposing substantial economic costs.
Such costs to the economy are expected to increase
further as the cumulative impacts of past and
ongoing global emissions continue to drive rising
global temperatures and related climate changes,
leading to increased climate-related risks to the
financial system.’’ Report on Climate-Related
Financial Risk, Financial Stability Oversight
Council, page 10 (Oct. 21, 2021) (FSOC Climate
Report), available at https://home.treasury.gov/
system/files/261/FSOC-Climate-Report.pdf.
11 The Financial Stability Oversight Council has
described the impacts of transition risks as: ‘‘. . .
[Changing] public policy, adoption of new
technologies, and shifting consumer and investor
preferences have the potential to impact the
allocation of capital . . .
10 (Oct. 21, 2021) (FSOC Climate
Report), available at https://home.treasury.gov/
system/files/261/FSOC-Climate-Report.pdf.
11 The Financial Stability Oversight Council has
described the impacts of transition risks as: ‘‘. . .
[Changing] public policy, adoption of new
technologies, and shifting consumer and investor
preferences have the potential to impact the
allocation of capital . . . . If these changes occur
in a disorderly way owing to substantial delays in
action or abrupt changes in policy, their impact on
firms, market participants, individuals, and
communities is likely to be more sudden and
disruptive.’’ FSOC Climate Report, page 13.
12 FSOC Climate Report, page 13.
13 For further information, see Staff Reports,
Federal Reserve Bank of New York, Understanding
the Linkages between Climate Change and
Inequality in the United States, No. 991 (Nov.
2021), available at https://www.newyorkfed.org/
research/staff_reports/sr991.html.
14 References to the board and management
throughout these principles should be understood
in accordance with their respective roles and
responsibilities and is not intended to conflict with
existing guidance regarding the roles of board and
management or advocate for a specific board
structure. See, e.g., SR 21–3/CA 21–1: Supervisory
Guidance on Board of Directors’ Effectiveness (Feb.
26, 2021), https://www.federalreserve.gov/
supervisionreg/srletters/SR2103.htm; OCC
Guidelines Establishing Heightened Standards for
Certain Large Insured National Banks, Insured
Federal Savings Associations, and Insured Federal
Branches, 12 CFR part 30, appendix D.
15 The principles are intended for financial
institutions with over $100 billion in total
consolidated assets. With respect to foreign banking
organizations, this includes organizations with
combined United States operations of greater than
$100 billion
for
Certain Large Insured National Banks, Insured
Federal Savings Associations, and Insured Federal
Branches, 12 CFR part 30, appendix D.
15 The principles are intended for financial
institutions with over $100 billion in total
consolidated assets. With respect to foreign banking
organizations, this includes organizations with
combined United States operations of greater than
$100 billion. The principles also are intended for
any branch or agency of a foreign banking
organization that individually has total assets of
greater than $100 billion.
and costs of incorporating the principles
into risk management frameworks.7
Comments received on the draft
principles were considered in the
development of the principles and will
assist the agencies as they consider
whether and how to provide additional
guidance in the future.
III. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3521) (PRA) states that
no agency may conduct or sponsor, nor
is the respondent required to respond
to, an information collection unless it
displays a currently valid Office of
Management and Budget (OMB) control
number.
The principles do not revise any
existing, or create any new, information
collections pursuant to the PRA. Rather,
any reporting, recordkeeping, or
disclosure activities mentioned in the
principles are usual and customary and
should occur in the normal course of
business as defined in the PRA.8
Consequently, no submissions will be
made to the OMB for review.
IV. Principles for Climate-Related
Financial Risk for Large Financial
Institutions
The financial impacts that result from
the economic effects of climate change
and the transition to a lower carbon
economy pose an emerging risk to the
safety and soundness of financial
institutions 9 and the financial stability
of the United States
ntly, no submissions will be
made to the OMB for review.
IV. Principles for Climate-Related
Financial Risk for Large Financial
Institutions
The financial impacts that result from
the economic effects of climate change
and the transition to a lower carbon
economy pose an emerging risk to the
safety and soundness of financial
institutions 9 and the financial stability
of the United States. Financial
institutions are likely to be affected by
both the physical risks and transition
risks associated with climate change
(collectively, climate-related financial
risks). Physical risks refer to the harm to
people and property arising from acute,
climate-related events, such as
hurricanes, wildfires, floods, and
heatwaves, and chronic shifts in
climate, including higher average
temperatures, changes in precipitation
patterns, sea level rise, and ocean
acidification.10 Transition risks refer to
stresses to institutions or sectors arising
from the shifts in policy, consumer and
business sentiment, or technologies
associated with the changes that would
be part of a transition to a lower carbon
economy.11
Physical and transition risks
associated with climate change could
affect households, communities,
businesses, and governments—
damaging property, impeding business
activity, affecting income, and altering
the value of assets and liabilities. These
risks may be propagated throughout the
economy and financial system. As a
result, the financial sector may
experience credit and market risks
associated with loss of income, defaults,
and changes in the values of assets,
liquidity risks associated with changing
demand for liquidity, operational risks
associated with disruptions to
infrastructure or other channels, or legal
risks.12
Weaknesses in how a financial
institution identifies, measures,
monitors, and controls the physical and
transition risks associated with a
changing climate could adversely affect
a financial institution’s safety and
soundness
liquidity risks associated with changing
demand for liquidity, operational risks
associated with disruptions to
infrastructure or other channels, or legal
risks.12
Weaknesses in how a financial
institution identifies, measures,
monitors, and controls the physical and
transition risks associated with a
changing climate could adversely affect
a financial institution’s safety and
soundness. The adverse effects of
climate change could also include a
potentially disproportionate impact on
the financially vulnerable, including
low-and-moderate-income (LMI) and
other underserved consumers and
communities.13
These principles provide a high-level
framework for the safe and sound
management of exposures to climate-
related financial risks, consistent with
the risk management frameworks
described in the agencies’ existing rules
and guidance.
The principles are intended to
support efforts by financial institutions
to focus on key aspects of climate-
related financial risk management. The
principles are designed to help financial
institutions’ boards of directors (boards)
and management make progress toward
incorporating climate-related financial
risks into risk management frameworks
in a manner consistent with safe and
sound practices. The principles are
intended to explain and supplement
existing risk management standards and
guidance on the role of boards and
management.14
Although all financial institutions,
regardless of size, may have material
exposures to climate-related financial
risks, these principles are intended for
the largest financial institutions, those
with over $100 billion in total
consolidated assets.15 Effective risk
management practices should be
appropriate to the size of the financial
institution and the nature, scope, and
risk of its activities
ll financial institutions,
regardless of size, may have material
exposures to climate-related financial
risks, these principles are intended for
the largest financial institutions, those
with over $100 billion in total
consolidated assets.15 Effective risk
management practices should be
appropriate to the size of the financial
institution and the nature, scope, and
risk of its activities. In keeping with the
agencies’ risk-based approach to
supervision, the agencies anticipate that
differences in large financial
institutions’ complexity of operations
and business models will result in
different approaches to addressing
climate-related financial risks. Some
large financial institutions are already
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developing governance structures,
processes, and analytical methodologies
to identify, measure, monitor, and
control for these risks. The agencies
understand that expertise in climate risk
and the incorporation of climate-related
financial risks into risk management
frameworks remain under development
in many large financial institutions and
will continue to evolve over time. The
agencies also recognize that the
incorporation of material climate-related
financial risks into various planning
processes will be iterative, as
measurement methodologies, models,
and data for analyzing these risks
continue to mature. The agencies
encourage large financial institutions to
take a risk-based approach in assessing
the climate-related financial risks
associated with individual customer
relationships and to take into account
the financial institution’s ability to
manage the risk
anning
processes will be iterative, as
measurement methodologies, models,
and data for analyzing these risks
continue to mature. The agencies
encourage large financial institutions to
take a risk-based approach in assessing
the climate-related financial risks
associated with individual customer
relationships and to take into account
the financial institution’s ability to
manage the risk. The principles neither
prohibit nor discourage financial
institutions from providing banking
services to customers of any specific
class or type, as permitted by law or
regulation. The decision regarding
whether to make a loan or to open,
close, or maintain an account rests with
the financial institution, so long as the
financial institution complies with
applicable laws and regulations.
The principles are intended to
promote a consistent understanding of
the effective management of climate-
related financial risks. The agencies may
consider providing additional resources
or guidance, as appropriate, to support
financial institutions in prudently
managing these risks while continuing
to meet the financial services needs of
their communities.
General Principles
Governance. An effective risk
management framework is essential to a
financial institution’s safe and sound
operation. A financial institution’s
board should understand the effects of
climate-related financial risks on the
financial institution in order to oversee
management’s implementation of the
institution’s business strategy, risk
management, and risk appetite. The
board should oversee the financial
institution’s risk-taking activities, hold
management accountable for adhering to
the risk management framework, and
allocate appropriate resources to
support climate-related financial risk
management
the
financial institution in order to oversee
management’s implementation of the
institution’s business strategy, risk
management, and risk appetite. The
board should oversee the financial
institution’s risk-taking activities, hold
management accountable for adhering to
the risk management framework, and
allocate appropriate resources to
support climate-related financial risk
management. The board should direct
management to provide timely,
accurate, and well-organized
information to permit the board to
oversee the measurement and
management of climate-related financial
risks to the financial institution. The
board should acquire sufficient
information to understand the
implications of climate-related financial
risks across various scenarios and
planning horizons, which may include
those that extend beyond the financial
institution’s typical strategic planning
horizon. If weaknesses or gaps in
climate-related financial risk
management are identified, the
information provided is incomplete, or
as otherwise warranted, the board
should challenge management’s
assessments and recommendations. The
board and management should support
the stature and independence of the
financial institution’s risk management
and internal audit functions and, in
their respective roles, assign
accountability for climate-related
financial risks within existing
organizational structures or establish
new structures for climate-related
financial risks.
Management is responsible for
implementing the financial institution’s
policies in accordance with the board’s
strategic direction and for executing the
financial institution’s overall strategic
plan and risk management framework.
This responsibility includes assuring
that there is sufficient expertise to
execute the strategic plan and
effectively managing all risks, including
climate-related financial risks
ible for
implementing the financial institution’s
policies in accordance with the board’s
strategic direction and for executing the
financial institution’s overall strategic
plan and risk management framework.
This responsibility includes assuring
that there is sufficient expertise to
execute the strategic plan and
effectively managing all risks, including
climate-related financial risks. This also
includes management’s responsibility to
oversee the development and
implementation of processes to identify,
measure, monitor, and control climate-
related financial risks within the
financial institution’s existing risk
management framework. Management
should also hold staff accountable for
controlling risks within established
lines of authority and responsibility.
Management is responsible for regularly
reporting to the board on the level and
nature of risks to the financial
institution, including material climate-
related financial risks. Management
should provide the board with sufficient
information for the board to understand
the impacts of material climate-related
financial risks to the financial
institution’s risk profile and make
sound, well-informed decisions. Where
dedicated climate risk organizational
structures are established by the board,
management should clearly define these
units’ responsibilities and interaction
with existing governance structures.
Policies, Procedures, and Limits.
Management should incorporate
material climate-related financial risks
into policies, procedures, and limits to
provide detailed guidance on the
financial institution’s approach to these
risks in line with the strategy and risk
appetite set by the board. Policies,
procedures, and limits should be
modified when necessary to reflect: (i)
the distinctive characteristics of climate-
related financial risks, such as the
potentially longer time horizon and
forward-looking nature of the risks; and
ts to
provide detailed guidance on the
financial institution’s approach to these
risks in line with the strategy and risk
appetite set by the board. Policies,
procedures, and limits should be
modified when necessary to reflect: (i)
the distinctive characteristics of climate-
related financial risks, such as the
potentially longer time horizon and
forward-looking nature of the risks; and
(ii) changes to the financial institution’s
operating environment or activities.
Strategic Planning. The board should
consider material climate-related
financial risk exposures when setting
and monitoring the financial
institution’s overall business strategy,
risk appetite, and when overseeing
management’s implementation of
capital plans. As part of forward-looking
strategic planning, the board should
consider and management should
address the potential impact of material
climate-related financial risk exposures
on the financial institution’s financial
condition, operations (including
geographic locations), and business
objectives over various time horizons.
The board should encourage
management to consider climate-related
financial risk impacts on the financial
institution’s other operational and legal
risks. Additionally, the board should
encourage management to consider the
impact that the financial institution’s
strategies to mitigate climate-related
financial risks could have on LMI and
other underserved communities and
their access to financial products and
services, consistent with the financial
institution’s obligations under
applicable consumer protection laws.
Any climate-related strategies and
commitments should align with and
support the financial institution’s
broader strategy, risk appetite, and risk
management framework
d
financial risks could have on LMI and
other underserved communities and
their access to financial products and
services, consistent with the financial
institution’s obligations under
applicable consumer protection laws.
Any climate-related strategies and
commitments should align with and
support the financial institution’s
broader strategy, risk appetite, and risk
management framework. In addition,
where financial institutions engage in
public communication of their climate-
related strategies, boards and
management should assure that any
public statements about their
institutions’ climate-related strategies
and commitments are consistent with
their internal strategies, risk appetite
statements, and risk management
frameworks.
Risk Management. Climate-related
financial risks can impact financial
institutions through a range of
traditional risk types. Management
should oversee the development and
implementation of processes to identify,
measure, monitor, and control
exposures to climate-related financial
risks within the financial institution’s
existing risk management framework.
Financial institutions with sound risk
management employ a comprehensive
process to identify emerging and
material risks related to the financial
institution’s business activities. The risk
identification process should include
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ramework.
Financial institutions with sound risk
management employ a comprehensive
process to identify emerging and
material risks related to the financial
institution’s business activities. The risk
identification process should include
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input from stakeholders across the
organization with relevant expertise
(e.g., business units, independent risk
management, internal audit, and legal).
Risk identification includes assessment
of climate-related financial risks across
a range of plausible scenarios and under
various time horizons.
As part of sound risk management,
management should develop processes
to measure and monitor material
climate-related financial risks and to
communicate and report the materiality
of those risks to internal stakeholders.
Material climate-related financial risk
exposures should be clearly defined,
aligned with the financial institution’s
risk appetite, and supported by
appropriate metrics (e.g., risk limits and
key risk indicators) and escalation
processes. Management should
incorporate material climate-related
financial risks into the financial
institution’s risk management system,
including internal controls and internal
audit.
Tools and approaches for measuring
and monitoring exposures to climate-
related financial risks include, among
others, exposure analysis, heat maps,
climate risk dashboards, and scenario
analysis. These tools can be leveraged to
assess a financial institution’s exposure
to both physical and transition risks in
both the shorter and longer term.
Outputs should inform the risk
identification process and the short- and
long-term financial risks to a financial
institution’s business model from
climate change.
Data, Risk Measurement, and
Reporting
isk dashboards, and scenario
analysis. These tools can be leveraged to
assess a financial institution’s exposure
to both physical and transition risks in
both the shorter and longer term.
Outputs should inform the risk
identification process and the short- and
long-term financial risks to a financial
institution’s business model from
climate change.
Data, Risk Measurement, and
Reporting. Sound climate-related
financial risk management depends on
the availability of timely, accurate,
consistent, complete, and relevant data.
Management should incorporate
climate-related financial risk
information into the financial
institution’s internal reporting,
monitoring, and escalation processes to
facilitate timely and sound decision-
making across the financial institution.
Effective risk data aggregation and
reporting capabilities allow
management to capture and report
climate-related financial risk exposures,
segmented or stratified by physical and
transition risks, based upon the
complexity and types of exposures.
Available data, risk measurement tools,
modeling methodologies, and reporting
practices continue to evolve at a rapid
pace; management should monitor these
developments and incorporate them
into the institution’s climate-related
financial risk management as warranted.
Scenario Analysis. Climate-related
scenario analysis is emerging as an
important approach for identifying,
measuring, and managing climate-
related financial risks. For the purposes
of these principles, climate-related
scenario analysis refers to exercises
used to conduct a forward-looking
assessment of the potential impact on a
financial institution of changes in the
economy, changes in the financial
system, or the distribution of physical
hazards resulting from climate-related
financial risks. These exercises differ
from traditional stress testing exercises
that typically assess the potential
impacts of transitory shocks to near-
term economic and financial conditions
ng
assessment of the potential impact on a
financial institution of changes in the
economy, changes in the financial
system, or the distribution of physical
hazards resulting from climate-related
financial risks. These exercises differ
from traditional stress testing exercises
that typically assess the potential
impacts of transitory shocks to near-
term economic and financial conditions.
An effective climate-related scenario
analysis framework provides a
comprehensive and forward-looking
perspective that financial institutions
can apply alongside existing risk
management practices to evaluate the
resiliency of a financial institution’s
strategy and risk management to the
structural changes arising from climate-
related financial risks.
Management should develop and
implement climate-related scenario
analysis frameworks in a manner
commensurate to the financial
institution’s size, complexity, business
activity, and risk profile. These
frameworks should include clearly
defined objectives that reflect the
financial institution’s overall climate-
related financial risk management
strategies. These objectives could
include, for example, exploring the
impacts of climate-related financial
risks on the financial institution’s
strategy and business model, identifying
and measuring vulnerability to relevant
climate-related financial risk factors
including physical and transition risks,
and estimating climate-related
exposures and potential losses across a
range of scenarios, including extreme
but plausible scenarios. A climate-
related scenario analysis framework can
also assist management in identifying
data and methodological limitations and
uncertainty in climate-related financial
risk management and informing
management’s assessment of the
adequacy of the institution’s climate-
related financial risk management
framework
ses across a
range of scenarios, including extreme
but plausible scenarios. A climate-
related scenario analysis framework can
also assist management in identifying
data and methodological limitations and
uncertainty in climate-related financial
risk management and informing
management’s assessment of the
adequacy of the institution’s climate-
related financial risk management
framework.
Climate-related scenario analyses
should be subject to management
oversight, validation, and quality
control standards that would be
commensurate to the financial
institution’s risk. Climate-related
scenario analysis results should be
clearly and regularly communicated to
the board and all relevant individuals
within the financial institution,
including an appropriate level of
information necessary to effectively
convey the assumptions, limitations,
and uncertainty of results.
Management of Risk Areas
A risk assessment process is part of a
sound risk management framework, and
it allows management to identify
emerging risks and to develop and
implement appropriate strategies to
mitigate those material risks.
Management should consider and
incorporate climate-related financial
risks when identifying and mitigating
all types of risk. These risk assessment
principles describe how climate-related
financial risks can be addressed in
various risk categories.
Credit Risk. Management should
consider climate-related financial risks
as part of the underwriting and ongoing
monitoring of portfolios. Effective credit
risk management practices could
include monitoring climate-related
credit risks through sectoral, geographic,
and single-name concentration analyses,
including credit risk concentrations
stemming from physical and transition
risks. As part of concentration risk
analysis, management should assess
potential changes in correlations across
exposures or asset classes
tfolios. Effective credit
risk management practices could
include monitoring climate-related
credit risks through sectoral, geographic,
and single-name concentration analyses,
including credit risk concentrations
stemming from physical and transition
risks. As part of concentration risk
analysis, management should assess
potential changes in correlations across
exposures or asset classes. Consistent
with the financial institution’s risk
appetite statement, management should
determine credit risk tolerances and
lending limits related to material
climate-related financial risks.
Liquidity Risk. Consistent with sound
oversight and liquidity risk
management, management should
assess whether climate-related financial
risks could affect its liquidity position
and, if so, incorporate those risks into
their liquidity risk management
practices and liquidity buffers.
Other Financial Risk. Management
should monitor interest rate risk and
other model inputs for greater volatility
or less predictability due to climate-
related financial risks. Where
appropriate, management should
account for this uncertainty in their risk
measurements and controls.
Management should monitor how
climate-related financial risks affect the
financial institution’s exposure to risk
related to changing prices. While market
participants are still researching how
tomeasureclimate-related price risk,
management should use the
bestmeasurement methodologies
reasonably available to them and refine
them over time.
Operational Risk. Management should
consider how climate-related financial
risk exposures may adversely impact a
financial institution’s operations,
control environment, and operational
resilience. Sound operational risk
management includes incorporating an
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nagement should
consider how climate-related financial
risk exposures may adversely impact a
financial institution’s operations,
control environment, and operational
resilience. Sound operational risk
management includes incorporating an
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Federal Register / Vol. 88, No. 208 / Monday, October 30, 2023 / Notices
assessment across all business lines and
operations, including operations
performed by third parties, and
considering climate-related impacts on
business continuity and the evolving
legal and regulatory landscape.
Legal and Compliance Risk.
Management should consider how
climate-related financial risks and risk
mitigation measures affect the legal and
regulatory landscape in which the
financial institution operates. This
should include, but is not limited to,
taking into account possible changes to
legal requirements for, or underwriting
considerations related to, flood or
disaster-related insurance, and ensuring
that fair lending monitoring programs
review whether and how the financial
institution’s risk mitigation measures
potentially discriminate against
consumers on a prohibited basis, such
as race, color, or national origin.
Other Nonfinancial Risk. Consistent
with sound oversight, the board and
management should monitor how the
execution of strategic decisions and the
operating environment affect the
financial institution’s financial
condition and operational resilience.
Management should also consider the
extent to which the financial
institution’s activities may increase the
risk of negative financial impact and
should implement adequate measures to
account for these risks where material.
Michael J. Hsu,
Acting Comptroller of the Currency.
By order of the Board of Governors of the
Federal Reserve System.
Ann E. Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation
the
extent to which the financial
institution’s activities may increase the
risk of negative financial impact and
should implement adequate measures to
account for these risks where material.
Michael J. Hsu,
Acting Comptroller of the Currency.
By order of the Board of Governors of the
Federal Reserve System.
Ann E. Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on October 24,
2023.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2023–23844 Filed 10–27–23; 8:45 am]
BILLING CODE 6210–01–P; 4810–33–P; 6714–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Disease Control and
Prevention
[30Day–24–23GL]
Agency Forms Undergoing Paperwork
Reduction Act Review
In accordance with the Paperwork
Reduction Act of 1995, the Centers for
Disease Control and Prevention (CDC)
has submitted the information
collection request titled ‘‘National
Wastewater Surveillance System for
SARS–CoV–2 and Other Infectious
Disease Targets of Public Health
Concern’’ to the Office of Management
and Budget (OMB) for review and
approval. CDC previously published a
‘‘Proposed Data Collection Submitted
for Public Comment and
Recommendations’’ notice on July 7,
2023 to obtain comments from the
public and affected agencies. CDC
received 4,476 comments related to this
notice. This notice serves to allow an
additional 30 days for public and
affected agency comments.
CDC will accept all comments for this
proposed information collection project.
The Office of Management and Budget
is particularly interested in comments
that:
(a) Evaluate whether the proposed
collection of information is necessary
for the proper performance of the
functions of the agency, including
whether the information will have
practical utility;
(b) Evaluate the accuracy of the
agencies estimate of the burden of the
proposed collection of information,
including the validity of the
methodology and assumptions used;
ed in comments
that:
(a) Evaluate whether the proposed
collection of information is necessary
for the proper performance of the
functions of the agency, including
whether the information will have
practical utility;
(b) Evaluate the accuracy of the
agencies estimate of the burden of the
proposed collection of information,
including the validity of the
methodology and assumptions used;
(c) Enhance the quality, utility, and
clarity of the information to be
collected;
(d) Minimize the burden of the
collection of information on those who
are to respond, including, through the
use of appropriate automated,
electronic, mechanical, or other
technological collection techniques or
other forms of information technology,
e.g., permitting electronic submission of
responses; and
(e) Assess information collection
costs.
To request additional information on
the proposed project or to obtain a copy
of the information collection plan and
instruments, call (404) 639–7570.
Comments and recommendations for the
proposed information collection should
be sent within 30 days of publication of
this notice to www.reginfo.gov/public/
do/PRAMain. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Direct written
comments and/or suggestions regarding
the items contained in this notice to the
Attention: CDC Desk Officer, Office of
Management and Budget, 725 17th
Street NW, Washington, DC 20503 or by
fax to (202) 395–5806. Provide written
comments within 30 days of notice
publication.
Proposed Project
National Wastewater Surveillance
System for SARS–CoV–2 and Other
Infectious Disease Targets of Public
Health Concern—New—National Center
for Emerging and Zoonotic Infectious
Diseases (NCEZID), Centers for Disease
Control and Prevention (CDC)
17th
Street NW, Washington, DC 20503 or by
fax to (202) 395–5806. Provide written
comments within 30 days of notice
publication.
Proposed Project
National Wastewater Surveillance
System for SARS–CoV–2 and Other
Infectious Disease Targets of Public
Health Concern—New—National Center
for Emerging and Zoonotic Infectious
Diseases (NCEZID), Centers for Disease
Control and Prevention (CDC).
Background and Brief Description
The Centers for Disease Control and
Prevention (CDC) seeks to continue and
expand existing information collection
by the National Wastewater
Surveillance System for COVID–19
currently approved under the COVID–
19 Public Health Emergency (PHE) PRA
waiver. This information collection
request is for three years.
The COVID–19 pandemic
demonstrated the need for timely,
actionable surveillance data to inform
disease prevention and control
activities. The genetic material of
SARS–CoV–2, the virus that causes
COVID–19, is detectable in the feces of
infected individuals, regardless of their
symptom status. Therefore, sampling
and testing wastewater provides a
means to assess SARS–CoV–2 infection
trends in the community independent of
clinical testing or other healthcare
indicators. This public health
surveillance approach can be used for
other infectious diseases or targets of
public health concern, such as mpox,
influenza, and antimicrobial resistance.
The National Wastewater Surveillance
System (NWSS) was originally
established to support the CDC COVID–
19 response, and now, NWSS serves as
a public health tool to provide
community-level disease trends. NWSS
was designed to permit the addition or
exchange of targets for wastewater
infectious disease testing. This built-in
flexibility will allow jurisdictions to
adapt wastewater testing to changing
public health needs, enable rapid
responses to outbreaks or emergencies,
and support broad capacity to detect
future, emerging disease threats
h tool to provide
community-level disease trends. NWSS
was designed to permit the addition or
exchange of targets for wastewater
infectious disease testing. This built-in
flexibility will allow jurisdictions to
adapt wastewater testing to changing
public health needs, enable rapid
responses to outbreaks or emergencies,
and support broad capacity to detect
future, emerging disease threats.
Wastewater data have provided
impactful information to local public
health authorities to confirm trends
observed in testing or hospitalization
rates, and to assert the need for
increased testing or healthcare
resources. NWSS has supported
jurisdictions throughout the United
States to implement wastewater
surveillance, and will continue to
support state, tribal, local, and territorial
(STLT) partners to collect wastewater
data. Together with CDC-funded
national-level wastewater testing by
commercial partners, jurisdictions
across the US have submitted data to
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