More Action Is Needed From The Biden Administration To Address The Drivers Of Climate Risk In Our Financial System

In response to the release of today’s Financial Stability Oversight Committee (FSOC) report on climate-related financial risk, Evergreen Action Campaigns Director Lena Moffitt released the following statement:

“Today’s FSOC report puts Wall Street on notice—our financial regulators acknowledge that climate change is threatening the financial stability of the United States, and they will no longer turn a blind eye.

“This acknowledgement is necessary, but it is not sufficient. And while the report lays out some initial steps for assessing and addressing climate-fueled financial risk, the action items included in the report must be only a baseline. Simply studying and disclosing climate risks is not enough. As President Biden’s Climate Finance Executive Order laid out, in order to truly address the risks that climate change is posing to our economy, financial regulators must mitigate the driver of this risk: the financing of fossil fuels. Putting on a band-aid helps only if you stop purposefully scraping your knee. 

“But in this report, despite the fact that the Dodd-Frank bill gives FSOC members the power and the responsibility to rein in Wall Street’s reckless fossil fuel financing, FSOC opts for less impactful measures. They can, and must, use this report as a springboard, not as a ceiling—now, we are looking for clear direction from FSOC as to when and how they will be taking additional steps. Without government leadership to rein in fossil fuel finance and protect our economy, the American people will be left holding the bill.”

The FSOC was formed by Congress following the 2008 recession to help federal financial regulators coordinate and address systemic risks that pose a threat to our financial system. As today’s report notes, climate change is precisely the kind of far-reaching, complex systemic threat that FSOC was created to address, and the member agencies must now leverage the tools at their disposal to do so. Evergreen had laid out our expectations for the FSOC report here.

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