NEW YORK (Reuters) – A top U.S. banking regulator has found that most industry players are in the early stages of assessing the risks that climate change poses to their businesses, three people familiar with the matter said.

The Office of the Comptroller of the Currency (OCC) conducted a study of 22 major U.S. banks to determine how they are considering the impact of climate change on their loan portfolios and operations.

In a recent letter to company executives, the OCC said it found that all banks have, to some extent, engaged in risk identification, but that the approaches and stages of development vary widely.

The contents of the letter, which was described to Reuters by sources, had not been previously reported.

The letter highlights gaps the OCC has identified in many banks’ preparedness to manage climate risks, which some industry experts say puts billions of dollars in assets at risk.

The OCC found that most banks are only early in the process of integrating climate risk into functions such as strategic and operational planning, internal audit and assessing their risk appetite, the people said.

She also added that significant work was needed to implement planned governance frameworks for climate risks, the sources said.

An OCC spokesman said the agency does not comment on its own surveillance activities. The sources spoke on condition of anonymity because of data confidentiality.

The OCC letter did not specify what specific measures the regulator wants banks to take, but the agency will continue to conduct risk-based supervisory activities, the people said.

(Reporting by Isla Binnie and Nupur Anand in New York; editing by Kate Entringer; reporting by Saeed Azhar; by Augustin Turpin)

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