First Climate Report from US Financial Regulator Underscores Threats to Economy

(Washington, DC – September 9, 2020) Today, a special subcommittee convened by a key federal financial regulator, the Commodity Futures Trading Commission (CFTC), released a first-of-its-kind report on climate-related risks to the U.S. financial system. The subcommittee who authored and unanimously approved the report includes a diversity of expertise, including representatives from financial services, energy, and agricultural industries, as well as from think tanks and civil society organizations from the environmental community. Nathaniel Keohane, Senior Vice President for Climate at EDF, is one of the subcommittee members.

“This report sends a resounding message to Wall Street and Main Street: unchecked climate change threatens the stability of our financial system. This threat matters for the millions of consumers, businesses, and farmers across the U.S. economy who depend on a stable financial system.

“Communities around the U.S. are already seeing the devastating impacts of climate change on their livelihoods, in the form of wildfires, hurricanes, floods, and more. This report shows clearly how these impacts pose risks to the financial system in every sector of our economy. Financial regulators have an urgent responsibility to address and manage climate risk, and this report offers a comprehensive set of recommendations outlining how they can act now.

“Financial regulators who ignore climate change do so at their own peril. In addition to the climate threats we do know, this report underscores the dangers of what we don’t know. Climate change could cause a range of potential damaging scenarios, but we don’t know when or how they could occur. That’s why regulators must put in place strong rules and guidance to mandate full and transparent disclosure of climate risk. Regulators should also help companies develop the data and tools they need to provide the information that their clients are demanding – and that the public deserves.”

• Nathaniel Keohane, Senior Vice President for Climate at Environmental Defense Fund