The Federal Reserve formally joined the Network of Central Banks and Supervisors for Greening the Financial System, or NGFS, as a member.

The NGFS is a group of central banks and supervisory authorities from around the world that are collaborating on the development of climate risk management tools for the financial sector.

The central bank had started participating in NGFS activities over a year ago, but not as a formal member. The Fed's membership in the group follows its biannual Financial Stability Report in which it stated that it expects banks to address systemic risks posed by rising global temperatures.

"As we develop our understanding of how best to assess the impact of climate change on the financial system, we look forward to continuing and deepening our discussions with our NGFS colleagues from around the world," said Federal Reserve Chair Jerome Powell.