Biden orders climate risk strategy for U.S. financial assets business and economic news
The executive order is the first step in the Biden administration’s efforts to reduce the risks of climate change to financial stability and to achieve its long-term goal of reducing greenhouse gas emissions in the United States.
President Joe Biden ordered his government to develop a strategy to quantify the risks to public and private financial assets from climate change.
In a four-page executive order signed on Thursday by President Obama, Secretary of the Treasury Janet Yellen (Janet Yellen) is required to serve as the head of the Financial Stability Supervisory Committee, recommending measures to reduce the risk of climate change to financial stability . The assessment will be provided within six months and will also detail the plans made by financial regulators to strengthen disclosure.
It is expected that a separate whole-government strategy will be developed within 120 days to identify and disclose climate risks to government plans, assets and liabilities. The report will be drafted by Brian Deese, Director of the National Economic Council, and Gina McCarthy, National Climate Advisor, in coordination with Yellen and the Office of Management and Budget. Will guide the Department of Labor to analyze how to protect pensions from the risks of climate change.
“Our modern financial system is based on the following assumptions: The climate is stable, and this assumption largely dominates existing financial models. This provides for the way we invest capital, the way we build society, and the way we have Brian Deese, chairman of the Basic National Economic Council, said in a phone call to reporters on Thursday. “It is clear today that we no longer live in such a world. “
Governments, regulators and business leaders on Wall Street have been debating how the financial industry should respond to environmental threats and whether companies should provide investors with more information about these risks.
Biden said in the order: “The intensified impact of climate change has brought physical risks to assets, publicly traded securities, private investments, and companies.” “At the same time, this global shift provides for the enhancement of U.S. competitiveness and economic growth. This creates opportunities for generations and at the same time creates high-paying job opportunities for workers.”
The executive order is the first step of the new government’s efforts to reduce the risks to financial stability caused by climate change and to achieve its long-term goal of reducing greenhouse gas emissions in the United States.
Under Biden’s order, the Director of OMB will consult with other agencies to determine the main drivers of federal climate risk exposure and develop methods to quantify climate risk for the president’s long-term budget plan. The OMB and the Economic Advisory Committee will also develop and publish government climate risk exposure assessments.