Bill > HR2823

This bill, called the Climate Change Financial Risk Act of 2025, requires the Federal Reserve Board to develop and conduct comprehensive financial risk analyses related to climate change. The bill establishes a Climate Risk Scenario Technical Development Group composed of 10 experts (5 climate scientists and 5 economists) who will help create climate risk scenarios modeling potential temperature increases and economic impacts. The legislation mandates the creation of three distinct climate risk scenarios: one with a 1.5-degree Celsius global temperature increase, another with a 2-degree increase, and a third reflecting current implementation of national climate policies. Covered financial entities with over $250 billion in assets will be required to undergo biennial stress tests that evaluate their ability to withstand financial losses under these climate change scenarios. The bill recognizes climate change as a significant emerging threat to financial stability, noting potential disruptions in energy systems, agriculture, infrastructure, and supply chains. The stress tests will assess physical risks (like extreme weather events) and transition risks (such as shifts in energy markets) to help financial institutions better understand and prepare for climate-related economic challenges. Importantly, during the first three analyses, covered entities will not face penalties, but will be required to develop climate risk resolution plans that address vulnerabilities identified in the testing process.

Business and Industry

https://www.congress.gov/bill/119th-congress/house-bill/2823/all-info