Climate Change Financial Risk Act of 2025

The Climate Change Financial Risk Act of 2025 (HR2823) was introduced in the House on April 10, 2025, and subsequently referred to the Committees on Financial Services and Energy and Commerce. This bill requires the Federal Reserve Board to develop financial risk analyses related to climate change for certain large nonbank financial companies and bank holding companies. These entities would be evaluated every two years on their capital adequacy under various climate change risk scenarios and would need to develop and submit climate risk resolution plans. This bill does not explicitly authorize or appropriate new funding. Instead, it creates new regulatory requirements that would necessitate increased operational spending by affected financial institutions. The mechanism is regulatory mandate, which would drive demand for compliance-related services. There is a companion bill, S1471, in the Senate, which indicates a coordinated legislative effort. Structural winners, should this bill advance, would be technology and consulting firms specializing in risk management, data analytics, and climate modeling, such as International Business Machines Corporation ($IBM), Accenture plc ($ACN), and DXC Technology Company ($DXC). These companies are positioned to provide the specialized software and consulting services required for financial institutions to comply with new climate risk reporting and capital planning mandates. Structural losers would be large financial institutions like JPMorgan Chase & Co. ($JPM), Bank of America Corporation ($BAC), Wells Fargo & Company ($WFC), Citigroup Inc. ($C), Morgan Stanley ($MS), and The Goldman Sachs Group, Inc. ($GS), which would incur increased compliance costs and potential capital allocation adjustments. The market data shows that over the last 7 days, all listed financial institutions have seen positive changes, ranging from +4.12% for $JPM to +9.41% for $C, while technology/consulting firms have mixed results, with $IBM up +4% and $ACN up +0.71%. Over 30 days, $JPM, $BAC, $C, $MS, and $GS are up, while $WFC, $IBM, $ACN, and $DXC are down or flat. As of April 7, 2026, the bill is in the early stages of the legislative process, having only been referred to committees. For the bill to progress, it would need to be considered and passed by these committees, then by the full House, and subsequently by the Senate (or its companion bill S1471 would need to pass the Senate), before being sent to the President for signature. Given its early stage, the timeline for potential enactment is uncertain and likely extends beyond the immediate future.