Warren presses big US banks to release climate change plans
The Massachusetts senator wants financial executives to respond by Feb. 7
Democratic presidential candidate Elizabeth Warren urged the eight biggest banks in the U.S. to release details of their assessments of and preparations for climate change.
"As climate change continues to affect our economy, it is critical to understand your bank's adaptation and mitigation strategies,” Warren wrote in a letter addressed to the CEOs of several large banks.
The Massachusetts senator requested that bank executives from JPMorgan and Chase, Citigroup, Bank of America, Goldman Sachs, Wells Fargo, Bank of New York Mellon, Morgan Stanley and State Street, respond to questions about the steps each institution is “taking to understand, adapt to, and mitigate the financial risks posed by the climate crisis” by Feb. 7.
Last year, the Bank of England published an open letter from several of its leaders disclosing how it planned to assess climate-related financial risk, and why it was doing so.
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“The prime responsibility for climate policy will continue to sit with governments,” the letter said. “And the private sector will determine the success of the adjustment. But as financial policymakers and prudential supervisors, we cannot ignore the obvious risks before our eyes.”
And last November, the U.S. Federal Reserve held its first-ever conference on climate change and economics, signaling that it may begin exploring how to incorporate risks from climate change into its assessment of financial stability.
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“While some central banks around the world are taking action to confront climate-related risks to the global financial system, U.S. regulators continue to ignore the risks, despite the San Francisco Fed's groundbreaking work," Warren wrote. "To protect themselves and the economy from climate-driven catastrophes, large financial institutions must act quickly to address risks."
While testifying before the Senate Banking Committee in July, Jerome Powell, the Federal Reserve chairman, said the central bank requires financial institutions to have a plan and to deal with severe weather events, particularly those in areas that are exposed to climate change. While Powell called climate change a threat to the economy, he doesn't view it as a priority, he said at the time.
“I guess I see climate change as a longer-run issue,” he said. “I don’t know that incorporating it into the day-to-day supervision of financial institutions would add much value.”