incorporating climate-related financial risks when identifying and mitigating all types of risk. While the agencies will eventually elaborate on risk assessment principles, it is suggested that financial institutions consider credit risk, liquidity risk, other financial risk, operational risk, legal/compliance risk, and other nonfinancial risk. Conclusion While there is no specific set of guidelines for financial institutions to follow for climate risk, compliance, and management, this is an area that all banks should begin considering from a safe and sound banking standpoint. Future guidance will likely apply or be required of larger financial institutions; however, the guidance and risk considerations should be contemplated by institutions of all sizes. Risks can impact even smaller institutions, so taking a proactive approach rather than making a reactive response is the best plan of action. It is important that financial institutions stay abreast of the hot-button area of climate change and climate risk from a compliance and risk management perspective, as the society in which we are living continues to set a higher standard for an environmentally friendly world. Banks must consider the various areas of risk, especially as they consider the safety and soundness of their institution. Julia A. Gutierrez serves as the Director of Education for Compliance Alliance, developing curriculum and presentations, as well as presenting at various schools and seminars, both live and in a livestream/ hybrid format. Julia brings over 20 years of financial industry experience to the Compliance Alliance team.
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