CRS report – Climate Change Risk Disclosures and the Securities and Exchange Commission, April 20 2021: “Potential risks to the U.S. financial system from climate change have attracted growing attention in government, academia, and media, raising questions about the roles of financial regulators in addressing such risks. Scientific assessments have concluded that human activities—and particularly carbon dioxide and methane emitted by fossil fuels, agriculture, and land use change—are extremely [>95% likelihood] likely the primary driver of the rise of global average temperature since 1950. Climate change—defined by the Federal Reserve as “the trend toward higher average global temperatures and accompanying environmental shifts such as rising sea levels and more severe weather events”—may impact multiple financial regulators’ responsibilities, including those of ensuring financial stability. Risks from climate change may belong to the category of physical risks, such as heavier and more frequent storms or wildfires that impose direct losses. Or they may consist of transition risk,meaning the risk that changing government policies or market perceptions might lead to sudden asset price drops, such as for carbon-emitting industries. A 2020 report by the Commodity Futures Trading Commission (CFTC) found that climate change could pose systemic risks to the U.S. financial system…”