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Home » Federal Reserve joins global group focused on fighting climate change

Federal Reserve joins global group focused on fighting climate change

Federal Reserve joins global group focused on fighting climate change

The Federal Reserve has made a move that cements its nod to the risk that climate change could pose to the financial system.

In a statement released Tuesday, the central bank said it has formally joined a global peer group that is addressing climate’s impact on finance. The Network of Central Banks and Supervisors for Greening the Financial System, as it’s called, was formed in 2017 and now has 83 members from around the world. The U.S. already had been an informal participant for more than a year.

“As we develop our understanding of how best to assess the impact of climate change on the financial system, we look forward to continuing and deepening our discussions with our … colleagues from around the world,” said Federal Reserve Board Chair Jerome H. Powell in a statement.

The issue of climate change has become a more pronounced topic at the Fed, in light of the persisting trend of higher average temperatures and environmental shifts such as rising sea levels and more frequent severe weather events.

For instance, in its most recent financial stability report, the Fed explored climate change for the first time, saying, in part, “Federal Reserve supervisors expect banks to have systems in place that appropriately identify, measure, control, and monitor all of their material risks, which for many banks are likely to extend to climate risks.”
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