Financial Risk

 

 

 

Our Plan To Shift Private Capital Toward Climate-Smart Investments

 

 

 

Download This Plan

 

 

 

 

Managing Climate-Related Financial Risks

The climate crisis poses multiple risks to companies and the financial system through physical risks—such as extreme weather events and sea level rise—and transition risks—such as policy reforms and market changes associated with transitioning to a lower-carbon economy. Although these risks have become more apparent and measurable, shareholders, investors, and regulators lack information about companies’ and investments’ exposure to climate-related risks. These physical and transition risks also increase systemic risk to the financial sector, but U.S. financial regulators are behind their global counterparts in deploying the financial and monetary policy tools needed to mitigate the systemic risks of climate change.

For the United States to meet its goals for decarbonization and climate resilience, private investment must shift away from activities that exacerbate the climate crisis and focus on the deployment of clean technologies and resilient infrastructure. Congress also must ensure the financial system is resilient to the economic transition and climate impacts to come.

 

Expose climate-related risks to investors and the public by requiring public companies to disclose their climate risks and credit agencies to disclose how they evaluate climate risk.

Identify and manage climate-related financial risks through the Federal Reserve, including applying climate change scenarios to financial stress tests.

Assess and report on the systemic risk climate change poses to the U.S. financial system through the Financial Stability Oversight Council and Commodity Futures Trading Commission.

More on Financial Risk

Chair Castor, Rep. Casten & 131 Other House Democrats Urge SEC to Finalize Rule on Climate Risk Disclosure

Jun 17, 2022 Press Release
"As the impacts of climate change continue to drive increasingly severe economic disruption and loss, investors are intensifying their demands for information regarding the legal, technological, and market changes from these impacts and the global transition to a net-zero economy," the letter reads.

Chair Castor Praises SEC Move to Protect Investors From Climate-Related Risks

Mar 21, 2022 Press Release
"Investors, pension fund managers and the public need better information about the physical and transition-related risks that climate change poses to hard-earned investments,” said Chair Castor.

Confronting Climate Impacts: Federal Strategies for Equitable Adaptation and Resilience

Mar 9, 2022 Hearing
This hearing will examine how the findings of the latest reports on climate impacts underscore the urgent need to develop a national climate adaptation and resilience strategy. It will also focus on ways to activate all sectors and levels of government to deliver actionable climate risk science, information, and tools, while also helping drive funding and investment to vulnerable communities.

Climate Crisis Committee to Hold Hearing on Confronting Climate Impacts

Mar 4, 2022 Press Release
This hearing will examine how the findings of the latest reports on climate impacts underscore the urgent need to develop a national climate adaptation and resilience strategy. It will also focus on ways to activate all sectors and levels of government to deliver actionable climate risk science, information, and tools, while also helping drive funding and investment to vulnerable communities.

Chair Castor: House Democrats Passed Hundreds Of Climate Solutions In 2021

Jan 4, 2022 Press Release
"A new year provides an opportunity to start fresh on clean energy and climate solutions, and build on the progress we made in 2021," said Chair Castor.

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