Climate Change Financial Risk Act of 2025
Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.
Summary
What This Bill Does
The bill creates sense of Congress documenting climate change economic risks including extreme weather costs exceeding 2.915 trillion since 1980, transition risks for fossil fuel companies, systemic risks to financial services, defines key terms including covered entity (250B+ or 100B+ at Fed discretion), physical risks (temperature, weather, flooding, wildfires, agriculture, water), transition risks (policy costs, technology, markets, and establishes a 10-member Climate Risk Scenario Technical Development Group (5 climate scientists, 5 economists) to advise the Fed on climate risk scenarios, determine financial risks, provide technical assistance. It relies on compliance mandates, reporting requirements, definition changes, and product standards. The main policy areas are Finance, Energy, Technology, and Social Welfare.
Who Benefits and How
Vulnerable and disadvantaged communities could face reduced risk, Financial system participants could face reduced risk, and Climate scientists and economists could gain revenue opportunities.
Who Bears the Burden and How
Federal Reserve Board of Governors would take on compliance duties, Large financial institutions (covered entities) would take on compliance duties, and Mid-size and smaller supervised financial institutions would take on compliance duties.
Key Provisions
- Creates sense of Congress documenting climate change economic risks including extreme weather costs exceeding 2.915 trillion since 1980, transition risks for fossil fuel companies, systemic risks to financial services...
- Defines key terms including covered entity (250B+ or 100B+ at Fed discretion), physical risks (temperature, weather, flooding, wildfires, agriculture, water), transition risks (policy costs, technology, markets...
- Establishes a 10-member Climate Risk Scenario Technical Development Group (5 climate scientists, 5 economists) to advise the Fed on climate risk scenarios, determine financial risks, provide technical assistance...
- Requires the Fed to develop 3 climate risk scenarios (1.5C, 2C, and current-trajectory warming) within 1 year, accounting for physical and transition risks across multiple economic disruption channels including supply...
- Amends the Financial Stability Act to require biennial climate stress tests for covered entities, with first 3 rounds penalty-free, then mandatory climate risk resolution plans with capital policies, and distribution...
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
The bill creates sense of Congress documenting climate change economic risks including extreme weather costs exceeding 2.915 trillion since 1980, transition risks for fossil fuel companies, systemic risks to financial services, defines key terms including covered entity (250B+ or 100B+ at Fed discretion), physical risks (temperature, weather, flooding, wildfires, agriculture, water), transition risks (policy costs, technology, markets, and establishes a 10-member Climate Risk Scenario Technical Development Group (5 climate scientists, 5 economists) to advise the Fed on climate risk scenarios, determine financial risks, provide technical assistance.
Key Policy Areas
Finance, Energy, Technology, Social Welfare
Primary Purpose
The bill creates sense of Congress documenting climate change economic risks including extreme weather costs exceeding 2.915 trillion since 1980, transition risks for fossil fuel companies, systemic risks to financial services, defines key terms including covered entity (250B+ or 100B+ at Fed discretion), physical risks (temperature, weather, flooding, wildfires, agriculture, water), transition risks (policy costs, technology, markets, and establishes a 10-member Climate Risk Scenario Technical Development Group (5 climate scientists, 5 economists) to advise the Fed on climate risk scenarios, determine financial risks, provide technical assistance.
Policy Domains
Climate Change Financial Risk Act of 2025
Identified Gains
- Vulnerable and disadvantaged communities
- Financial system participants
- Climate scientists and economists
Identified Costs
- Federal Reserve Board of Governors
- Large financial institutions (covered entities)
- Mid-size and smaller supervised financial institutions
- Large financial institutions with 250B+ assets
- Federal Reserve, OCC, and FDIC
Sponsors
Legislative Progress
In CommitteeMr. Schatz (for himself, Ms. Warren, Mr. Merkley, Mr. Van …
Read twice and referred to the Committee on Banking, Housing, …
Introduced in Senate
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Large financial institutions (covered entities), Large financial institutions with 250B+ assets, Mid-size and smaller supervised financial institutions
Federal Reserve Board of Governors, Federal Reserve, OCC, and FDIC
Bank shareholders, Financial services industry, Financial system participants
Positive-direction: Financial system participants
Negative-direction: Bank shareholders
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "covered_entity"
- → Nonbank financial company or bank holding company with 250B+ in assets (or 100B+ if Fed determines appropriate)
- "surveyed_entity"
- → Supervised institution with 10B+ in assets that is not a covered entity
- "board_of_governors"
- → Board of Governors of the Federal Reserve System
- "climate_science_leads"
- → NOAA, EPA, DOE, NASA, USGS, Interior, State Dept, and other Federal agencies
- "technical_development_group"
- → Climate Risk Scenario Technical Development Group (10 members: 5 climate scientists, 5 economists)
Key Definitions
Terms defined in this bill
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology