White House Strategy Sets the Stage for Bold Action to Mitigate Climate Risk

Today, the White House--under the leadership of National Economic Council Director Brian Deese and National Climate Advisor Gina McCarthy--released a roadmap for a government-wide effort to identify and mitigate climate-related financial risk, as directed by President Biden's May Executive Order.

In the report, the White House makes clear that climate change poses systemic risks to the economy and financial system, and outlines a framework and strategy for addressing these risks through financial regulation and federal financial management tools. The report notably endorses a "precautionary approach" for reducing climate risks by urgently investing in decarbonization, and calls for "holding financial institutions accountable for properly measuring, disclosing, managing, and mitigating climate-related financial risks." However, the report does not specify regulatory action for addressing one of the primary drivers of growing climate risks: Wall Street's massive unchecked fossil fuel financing.

Today's report comes ahead of the expected release, as early as next week, of a highly anticipated report from the Financial Stability Oversight Council (FSOC), led by Treasury Secretary Janet Yellen, which is expected to offer more detailed recommendations for how financial regulators can reduce the threat that the climate crisis poses to our economy.

In response, Sierra Club Fossil-Free Finance Campaign Manager Ben Cushing released the following statement:

"Climate change is already having major effects on our economy and our society, and those will become increasingly catastrophic if we don't act now. The strategy released by the White House today lays critical groundwork for fulfilling President Biden's promise to tackle the threats that climate change poses to our economy. Now it must be followed by a bold plan of action from Secretary Yellen and the FSOC to use all the tools available to financial regulators to rein in Wall Street's risky fossil fuel financing and ensure that the climate crisis doesn't push us into financial crisis."