FOR IMMEDIATE RELEASE
September 9, 2020
Collin Rees, collin [at] priceofoil.org
Jamie Henn, jamie [at] fossilfreemedia.org
Stop the Money Pipeline Coalition: Financial Regulators Must Do More to Address Climate Risk
WASHINGTON, DC — Today, the Commodity Futures Trading Commission issued its report on the risks that the climate emergency poses to the financial system.
The report, Managing Climate Risk in the U.S. Financial System, warns of the grave threats that climate change poses to financial markets and institutions. It fails to mention, however, the threat that financial institutions pose to the climate and economy by their ongoing investments in fossil fuels — a risk the Federal Reserve acknowledged in a 2016 rule proposal.
Stop the Money Pipeline has previously issued “Building Climate-Resilient Finance in the Recovery: Guidelines for Lawmakers and Regulators”.
The report comes against the backdrop of raging wildfires across much of the Western United states and on the heels of a major hurricane on the Gulf Coast, both of which have already caused billions of dollars in damages.
Stop the Money Pipeline and various coalition partners issued the following responses to the report:
“There’s something backwards about a report that talks about the threat climate change poses to financial institutions, but fails to mention the threat financial institutions pose to the climate. As long as banks, insurance companies, asset managers, and institutional investors continue to pour money into fossil fuels and deforestation, the climate emergency will continue to intensify. With its clear warnings about the risks climate change poses to US financial markets, this report is certainly a step forward, but with much of the Western United States currently on fire, now is a moment for leaps and bounds. If financial institutions won’t take action to stop the money pipeline fueling the climate crisis, regulators must. The next step from the federal government on climate risk can’t be another report: it needs to be clear action to address the crisis,” said Amy Gray, Stop the Money Pipeline co-coordinator.
“The CFTC’s report is welcomed, but what comes next is far more important. Western states are literally burning up as this report is released. Its recommendations are minimal; adopting them and going much further must be a priority of the next administration. Comprehensive climate policy must include regulating the financial system, and it’s critical that the people in charge of Joe Biden’s policy aren’t Wall Street and BlackRock insiders who’ve been driving the climate crisis for decades,” said Collin Rees, Senior Analyst with Oil Change International.
“This report is an important acknowledgement that the U.S. financial system faces grave climate risks. But it also generates outsize climate impact. The world’s top four fossil banks are all headquartered in the U.S., responsible for 30% of global fossil lending and underwriting since Paris. If business as usual continues, any climate crash would largely be a U.S. financial product. U.S. regulators must mandate that U.S. financial institutions disclose and phase out their climate impact with an urgency that matches the scale of the crisis,” said Jason Opeña Disterhoft, Climate and Energy Senior Campaigner at Rainforest Action Network.
“It’s great for the committee to recognize that the climate crisis poses a grave threat to finance. But its recommendations fall far short. They mostly involve more data and analysis. We need action, now. U.S. financial regulators have the authority to help mitigate the climate crisis, and they need to use it. The best way to protect anything from climate change, whether people in wildfire or flood zones or giant banks, is to stop climate change,” said David Arkush, Director of Public Citizen’s Climate Program.