FILE PHOTO: Abandoned cars are left on a flooded highway, as local media reported the remnants of Tropical Storm Ida bringing drenching rain and the threat of flash floods and tornadoes to parts of the northern mid-Atlantic, in the Queens borough of New York City, U.S., September 2, 2021. REUTERS/Brendan McDermid
October 21, 2021
By Pete Schroeder
WASHINGTON (Reuters) – A top U.S. regulatory panel is scheduled on Thursday to unveil recommendations for ensuring the financial system can withstand risks created by climate change, a development that could advance new rules and stricter oversight on Wall Street.
The report by the Financial Stability Oversight Council, which comprises the heads of the top financial agencies and is chaired by Treasury Secretary Janet Yellen, is part of President Joe Biden’s plan to aggressively tackle climate change and comes ahead of his trip to Glasgow, Scotland, for the United Nations climate summit.
“This is the first time that all of the banking and financial regulators will come out in one document and talk about what they can do on climate change,” said Todd Phillips, director of financial regulation at the Center for American Progress, a liberal think tank.
Climate change could upend the financial system because physical threats such as rising sea levels, as well as policies and carbon-neutral technologies aimed at slowing global warming, could destroy trillions of dollars of assets, risk experts say.
In a 2020 report, the Commodity Futures Trading Commission (CFTC) cited data estimating that $1 trillion-$4 trillion of global wealth tied to fossil fuel assets could ultimately be lost.
With a record $51 billion pouring into U.S. sustainable funds in 2020, investors are also pushing for better information on the risks companies face from climate change.
U.S. regulators did almost nothing under Republican former President Donald Trump to tackle climate risks. Biden, a Democrat, has said he wants every government agency to begin incorporating climate risk into their agenda, and last week the White House published its own report outlining how financial agencies are responding.
At the Securities and Exchange Commission, officials are already drafting rules for how companies should disclose climate change risks, while the Federal Reserve has begun pressing banks for data on how their balance sheets would be affected by climate change, Reuters reported.
Progressives say much more needs to be done.
“This document, I think, will be a framework for how they will move forward,” Phillips said.
(Reporting by Pete Schroeder; Editing by Leslie Adler)
Source: One America News Network
