Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

US Treasury establishes climate-related financial risk advisory committee

© Shutterstock / Frennet StudioPost Thumbnail

The US Treasury has launched a climate-related financial risk advisory committee as part of the Financial Stability Oversight Council’s plans to better identify the risks that climate change poses to the financial system.

    • The Climate-related Financial Risk Advisory Committee (CFRAC) will help the Council to gather and analyse data, and provide guidance on how best to mitigate climate risk.
    • An advisory committee on climate risk highlights growing US recognition of the dangers of ignoring its impacts.
    • The Committee will accelerate the progress being made by US financial regulators to address climate-related risks.

The Council has appointed the team as part of a commitment made in 2021 to ensure financial stability within the US, following the treasury’s recognition of the already significant costs of human-induced climate change such as rising sea levels, droughts, wildfires and intensifying storms, among others.

The move could also help the country in its goal of achieving a net-zero economy by 2050.

What the Committee has set out to do

The CFRAC will assist the Council in gathering data and analysing climate-related risks, before making recommendations on how they can best be mitigated.

For example, it will identify data inconsistencies and recommend options on how to fill any gaps.

Its 20 members come from various backgrounds, including the financial services industry, non-governmental research institutions, climate-related data and analytics providers, non-profit organisations and academia. Their first meeting is expected to be held in early 2023.

Secretary of the Treasury Janet L. Yellen said: “Assessing climate-related financial risk is a complex and important task.”

She added: “We will leverage the expertise of those outside of government and work collaboratively to improve our collective understanding of how climate change may impact the financial sector. The newly established advisory committee will also ensure that state and federal policymakers hear from leading experts on climate-related financial risks.”

US financial regulators are making significant progress in addressing climate risk 

A scorecard published by non-profit organisation Ceres in June 2022 showed that US financial regulators across nine federal agencies had taken notable steps to address climate-related financial risk within the previous year.

Their actions have likely been informed by the Financial Stability Oversight Council, which acknowledged for the first time in October 2021 that climate change was a threat to the US financial system.

Progress continues to be made as the Federal Reserve launched a climate risk pilot for six major banksBank of America (NYSE:BAC), Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), JPMorgan Chase (NYSE:JPM), Morgan Stanley (NYSE:MS) and Wells Fargo (NYSE:WFC).

The project will involve each bank exploring the impact of different climate scenarios on selected parts of their businesses, gathering data throughout 2023 before sharing it with the Fed for further analysis.

More from SG Voice

Latest Posts