69 Organizations Tell Fed to Stop Buying Fossil Fuel Debt
In letter, groups outline how the Fed has prioritized fossil fuels in its response to the pandemic.
WASHINGTON - Today in a letter to the Federal Reserve (the Fed), 69 public accountability, environmental, economic justice, science, health, and religious organizations and private companies called on the Fed to stop purchasing corporate debt from the fossil fuel sector through its emergency facilities created to address COVID-19’s economic fallout.
- End the purchase of corporate debt from the fossil fuel sector through the SMCCF, the Primary Market Corporate Credit Facility, or any other emergency facility;
- Analyze and disclose the climate risks of all firms represented in the emergency lending portfolio, including the level of greenhouse gas emissions;
- Apply meaningful conditions on the credit facilities: a ban on participating companies issuing dividends or buying back its shares, restrictions on executive compensation, and the retention of workers well beyond making a “commercially reasonable effort”;
- Focus on mitigating climate risks in the Fed’s role as regulator, instead of exacerbating them in the Fed’s role as lender of last resort.
"Ultimately, through these debt purchases, the Fed is exposing the public to financial losses through credit risk, market risk, and operational risk due to exacerbation of the climate crisis," said David Arkush, Climate Program Director at Public Citizen. "The Fed should be doing everything it can to slow and ultimately halt the freight train of economic risk bearing down on us because of the climate crisis. But with actions like these, it's shoveling coal into the boiler."
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