A group of 19 large banks in the United States and Canada has formed a climate risk consortium in response to calls from investors and regulators that banks work to mitigate climate-related risks within their own operations, as well as similar risks posed by the activities of their clients, customers, and borrowers.

The group, formed with the Risk Management Association (RMA) and financial institutions including Bank of America, Wells Fargo, U.S. Bank, and more, will “develop standards for banks to integrate climate risk management throughout their operations, preparing the industry to help economies transition to a low-carbon future,” according to a press release Wednesday.

The consortium will be chaired by Mary Obasi, global climate risk executive for Bank of America, and “will advance practices for member banks and the broader industry by assessing current efforts and developing consistent taxonomy, frameworks, and standards for climate risk management.”

The group is engaging with regulators and other key policymakers “to help inform ongoing policy considerations specific to a changing climate.”

The consortium launched in September 2021 with 17 members, according to the RMA. It will offer practical advice to banks on addressing climate risk, like how to develop a strategy that includes a risk appetite as well as training, policies, and board assessments. In addition, the consortium will help banks assess and prepare for climate-related disclosures, develop common metrics and targets for reporting and benchmarking, and structure organizational design for scenario analysis and stress testing.

“As a financial institution, it is critical that we manage and mitigate risk related to climate change. This includes physical risks, transition risks—and opportunities—that will impact communities, the markets, consumer preferences, and regulations,” said Obasi in the press release. “In the same way that banks played a key role in providing funding to businesses and communities through the pandemic, financial institutions will continue to be an essential part of—and play a pivotal role in—the transition to a net zero, more sustainable economy.”

The consortium is seeking to involve more mid-tier financial institutions in its efforts, the RMA said.

Regulators including the Securities and Exchange Commission (SEC), Office of the Comptroller of the Currency, and Commodity Futures Trading Commission have issued guidance, reports, and alerts over the past year regarding climate-related risks faced by banks and other financial institutions. Some agencies have created new climate task forces or hired climate risk officers.

The SEC is preparing to propose a new rule mandating climate risk disclosures for public companies, perhaps pegged to standards issued by the Task Force on Climate-Related Financial Disclosures.

Fed Chair Jerome Powell, in his nomination hearing for a second term before the Senate Banking Committee on Tuesday, said climate stress tests for banks will likely be a “key tool going forward.” Powell’s comments reinforced previous statements by Fed Governor Lael Brainard, whom President Joe Biden has nominated to serve as the agency’s vice chair.