European Central Bank Raises Bar for U.S. Climate Finance Action

Today, following the announcement of the European Central Bank’s (ECB) new climate finance action plan, Evergreen Action Executive Director Jamal Raad released the following statement: 

“Today, the European Central Bank laid down a marker—climate change and the health of our financial sector are inextricably linked, and it is past time for financial regulators to take action. The ECB climate action plan puts forward meaningful steps to ensure that the European financial system is assessing and addressing climate risk. 

“Financial regulators in the United States must be quick to follow suit. As record-breaking heat-waves and wildfires scorch communities across the country, it is increasingly clear that climate change threatens to destabilize the very underpinnings of our economy. Left unchecked, ordinary Americans will be forced to foot the bill for the malfeasance of Wall Street and big corporations—just as they were in 2008. 

“President Biden’s Executive Order this May was a powerful starting gun—but now, agencies, particularly those that make up the Financial Stability Oversight Council, must follow through. Before COP26 in November, our financial regulators must make clear how they will marshal every tool available to address climate risk, hold Wall Street accountable for their fossil fuel investments that continue to exacerbate climate risk, and protect the financial security of every American. Without a strong plan in place at home, our attempts to lead the international community cannot succeed.” 

On May 20th, 2021, President Biden issued an Executive Order directing his administration to develop a whole of government approach to identifying and mitigating climate-related financial risk—but that work has only just begun. The President’s order called for the Financial Stability Oversight Council (FSOC) to issue a report in the coming months recommending actions to reduce risks to financial stability.