This bill aims to enhance the United States' financial system's ability to identify, assess, and mitigate climate-related financial risks by establishing new structures and mandates within federal agencies. It creates the Climate Financial Risk Committee within the Financial Stability Oversight Council (FSOC) to coordinate efforts, share information, and develop common approaches among member agencies. Complementing this, an Advisory Committee on Climate Risk is also established, comprising up to 30 experts from various fields, including climate science, economics, and financial sectors, to provide external consultation and recommendations to the FSOC.

The legislation mandates the FSOC to publish an annual report assessing the potential impact of climate-related risks on U.S. financial stability, evaluating regulatory expertise and data quality, and providing recommendations to improve the financial regulatory system. Furthermore, it requires federal banking agencies and the National Credit Union Administration to update their supervisory guidance to incorporate climate financial risk for institutions with over $50 billion in assets. The FSOC must also update its guidance for designating nonbank Systemically Important Financial Institutions (SIFIs) to include climate financial risk considerations.

The bill directs the Federal Insurance Office (FIO) to publish a report assessing climate financial risk's impact on the insurance sector and recommending improvements to regulation and supervision. The FIO is also tasked with collecting and annually reporting granular homeowners insurance underwriting data, disaggregated by zip code, to assess climate-related risks across state insurance markets and their potential impact on financial stability. Finally, it expresses a Sense of Congress that federal financial regulatory agencies should improve global coordination by joining international organizations focused on climate financial risk and working with international regulators.