Treasury Press Release: “The Financial Stability Oversight Council (FSOC) has released a new report in response to President Biden’s Executive Order 14030, Climate-related Financial Risk. For the first time, FSOC has identified climate change as an emerging and increasing threat to U.S. financial stability. The report and accompanying recommendations demonstrate FSOC’s commitment to building on and accelerating existing efforts on climate change through concrete recommendations for member agencies to:
- Assess climate-related financial risks to financial stability, including through scenario analysis, and evaluate the need for new or revised regulations or supervisory guidance to account for climate-related financial risks;
- Enhance climate-related disclosures to give investors and market participants the information they need to make informed decisions, which will also help regulators and financial institutions assess and manage climate-related risks;
- Enhance actionable climate-related data to allow better risk measurement by regulators and in the private sector; and
- Build capacity and expertise to ensure that climate-related financial risks are identified and managed.
“Climate change is an emerging and increasing threat to America’s financial system that requires action,” Secretary of the Treasury Janet L. Yellen said. “FSOC’s report and recommendations represent an important first step towards making our financial system more resilient to the threat of climate change. These measures will support the Administration’s urgent, whole-of-government effort on climate change and help the financial system support an orderly, economy-wide transition toward the goal of net-zero emissions.”
The full report and recommendations can be found here. A factsheet on FSOC’s actions can be found here. A copy of Secretary Yellen’s remarks during the open session can be found here and a readout of FSOC’s meeting can be found here...”
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