Fossil Free Financing Act Is A Vital Step To Protect the Economy From A Climate Crash

Following the House introduction of the Fossil Free Financing Act, Evergreen Action Campaigns Director Lena Moffitt released the following statement:

“Regulators’ refusal to rein in Wall Street’s reckless risk-taking drove our economy off a cliff in 2008, and now, Wall Street’s climate-risky behavior could lead to an even bigger financial disaster if financial regulators don’t act. The Fed must fulfill its mandate to protect the American economy from a climate-fueled crash by using every available tool to limit climate risk in our market, but so far, it hasn’t done nearly enough. The Fossil Free Financing Act will bring us one step closer to sound financial regulation by ordering the Fed to do something it already has the authority to be doing—limiting how much greenhouse gas pollution a bank can finance, which is absolutely essential to reducing the climate risks that the financial sector, and all of us, face. We applaud Representatives Mondaire Jones, Ayanna Pressley, and Rashida Tlaib for their work on this important legislation, and we look forward to their continued work to protect working Americans from Wall Street’s short-sighted greed.”

Last month, Evergreen published 5 Steps The Next Federal Reserve Chair Must Take To Address Climate-Related Financial Risk, a new policy report outlining why action from the Fed to rein in climate risk is essential and detailing 5 essential action steps that the next Fed chair must take to confront the threat that climate change poses to our entire financial system:

  1. Creating mandatory climate-risk disclosure rules 

  2. Conducting regular climate stress tests 

  3. Setting “capital requirements'' to ensure banks internalize some climate-related risks

  4. Limiting investments that are not in line with the Paris agreement

  5. Updating the Community Reinvestment Act regulations