Biden orders climate risk strategy for US financial assets Business and Economy News


The executive order represents a first step in the Biden administration’s efforts to reduce the risks of climate change to financial stability and meet its long-term goal of reducing greenhouse gas emissions. to the United States.

Per Bloomberg

President Joe Biden orders his administration to create a strategy to quantify the risks of climate change for public and private financial assets.

In a four-page executive order signed Thursday, the president called on Treasury Secretary Janet Yellen, in her capacity as head of the Financial Stability Supervisory Board, to recommend measures to reduce climate risks in the country. financial stability, according to the administration. This assessment, which would be provided within six months, would also detail the plans that financial regulators have to strengthen disclosure.

An independent government-wide strategy is expected to be developed to identify and disseminate climate risk to government programs, assets and liabilities within 120 days. It will be drafted by National Economic Council Director Brian Deese and National Climate Advisor Gina McCarthy in coordination with Yellen and the Office of Management and Budgets. The Department of Labor will be aimed at analyzing how to protect pensions from the risk of climate change.

“Our modern financial system was based on the assumption that the climate was stable and that the assumption has largely dominated existing financial models, and has grounded the way we invest capital, the way we have built society, and the way we which we plan for the long term, “National Economic Council director Brian Deese said Thursday. “Today it is clear that we no longer live in a world like this.”

Wall Street governments, regulators, and business leaders have debated how the financial industry should prepare for environmental threats and whether companies should provide more information to investors about these risks.

“The intensifying impacts of climate change pose a physical risk to assets, stock market securities, private investment and business,” Biden said in the order. “At the same time, this global change presents generational opportunities to improve U.S. competitiveness and economic growth, while creating well-paid job opportunities for workers.”

The executive order represents a first step in the new administration’s efforts to reduce the risks posed by climate change to financial stability and meet its long-term goal of reducing greenhouse gas emissions in the US .

Under Biden’s order, the OMB director, in consultation with other agencies, will identify the main drivers of federal climate risk exposure and develop ways to quantify climate risk for the president’s long-term budget projections. . OMB and the Council of Economic Advisers will also develop and publish a government climate risk exposure assessment.

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