(a) Describe any processes the registrant has for identifying, assessing, and managing climate-related risks. If applicable, a registrant may also describe any processes for identifying, assessing, and managing climate-related opportunities when responding to any of the provisions in this section.
(1) When describing any processes for identifying and assessing climate-related risks, disclose, as applicable, how the registrant:
(i) Determines the relative significance of climate-related risks compared to other risks;
(ii) Considers existing or likely regulatory requirements or policies, such as GHG emissions limits, when identifying climate-related risks;
(iii) Considers shifts in customer or counterparty preferences, technological changes, or changes in market prices in assessing potential transition risks; and
(iv) Determines the materiality of climate-related risks, including how it assesses the potential scope and impact of an identified climate-related risk, such as the risks identified in response to Section 229.1502.
(2) When describing any processes for managing climate-related risks, disclose, as applicable, how the registrant:
(i) Decides whether to mitigate, accept, or adapt to a particular risk;
(ii) Prioritizes whether to address climate-related risks; and
(iii) Determines how to mitigate any high priority risks.
(b) Disclose whether and how any processes described in response to paragraph (a) of this section are integrated into the registrant’s overall risk management system or processes. If a separate board or management committee is responsible for assessing and managing climate- related risks, a registrant should disclose how that committee interacts with the registrant’s board or management committee governing risks.
(c)(1) If the registrant has adopted a transition plan as part of its climate-related risk management strategy, describe the plan, including the relevant metrics and targets used to identify and manage any physical and transition risks. To allow for an understanding of the registrant’s progress to meet the plan’s targets or goals over time, a registrant must update its disclosure about the transition plan each fiscal year by describing the actions taken during the year to achieve the plan’s targets or goals.
(2) If the registrant has adopted a transition plan, discuss, as applicable:
(i) How the registrant plans to mitigate or adapt to any identified physical risks, including but not limited to those concerning energy, land, or water use and management;
(ii) How the registrant plans to mitigate or adapt to any identified transition risks, including the following:
(A) Laws, regulations, or policies that:
(1) Restrict GHG emissions or products with high GHG footprints, including emissions caps; or
(2) Require the protection of high conservation value land or natural assets;
(B) Imposition of a carbon price; and
(C) Changing demands or preferences of consumers, investors, employees, and business counterparties.
(3) If applicable, a registrant that has adopted a transition plan as part of its climate-related risk management strategy may also describe how it plans to achieve any identified climate-related opportunities, such as:
(i) The production of products that may facilitate the transition to a lower carbon economy, such as low emission modes of transportation and supporting infrastructure;
(ii) The generation or use of renewable power;
(iii) The production or use of low waste, recycled, or other consumer products that require less carbon intensive production methods;
(iv) The setting of conservation goals and targets that would help reduce GHG emissions; and
(v)The provision of services related to any transition to a lower carbon economy.