Democrats call on US financial regulators to do more on climate

Nineteen Democrats and one independent are calling on U.S. financial regulators to do more to address financial risks posed by the changing climate.

The lawmakers, led by Sen. Elizabeth Warren (D-Mass.) and Rep. Sean Casten (D-Ill.), wrote to leaders of the Federal Reserve, Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) on Thursday to call for more action. 

“The United States’ lack of progress and innovation in establishing robust measures to address the financial and economic risks from climate change places us behind our international peers and is counterproductive to American interests,” they wrote in a letter first shared with The Hill.

The letter particularly raises concern about a report from Bloomberg that said American regulators upended an effort to make climate risk more of a focus in international financial rules. 

“We urge you to take decisive action on climate risk and to cease your obstruction of progress on global financial rules,” the Democrats wrote to the regulators. 

They and others who have called for more climate considerations in financial policy point to both the physical risks posed by more frequent and more intense extreme weather. 

Supporters of more climate consideration also point to “transition risk” stemming from changes to the economy that come from efforts to cut carbon emissions and reduce fossil fuel use.

But consideration of climate issues in investing and financial policy has also become a hot button issue because Republicans have railed against climate-conscious investing and argued that those who want to consider climate in financial policy are seeking to tip the scales toward greener industries. 

The FDIC declined to comment. A Federal Reserve spokesperson said simply, “We have received the letter and plan to respond.” The OCC did not immediately respond to a request for comment.