Liz Doherty, liz.doherty@sierraclub.org
Washington, DC -- Today, President Biden issued a broad-ranging Executive Order to address climate-related financial risks to the U.S. economy, including steps to begin mitigating the damage caused by the financing of fossil fuels and other risky, high-carbon sectors.
The Executive Order on “Climate-Related Financial Risk” requires the White House to develop a comprehensive strategy within 120 days to identify and mitigate climate-related financial risks to the U.S. government and the economy. The order also asks Treasury Secretary Yellen to work with members of the Financial Stability Oversight Council to assess systemic climate-related risks and deliver a plan, including regulatory and supervisory actions, within 180 days. The order also sets in motion critical action across the U.S. government to accelerate climate progress, including steps to support investors’ ability to protect their savings and pensions from climate-related risks; integrate climate risks into federal lending, underwriting and procurement programs; and reduce the federal government’s exposure to climate risks.
Earlier this week, the International Energy Association (IEA) issued a major report confirming that in order to limit global warming to 1.5°C and achieve net zero emissions by 2050, “there is no need for investment in new fossil fuel supply” — a landmark statement given the fact that companies, financial institutions, investors, and governments around the world have long relied on IEA projections to justify continued investments in fossil fuel expansion. The report demonstrates that in order to reach net zero by midcentury or sooner — a goal shared by President Biden and many of the largest U.S. financial institutions — financing of fossil fuel expansion must end immediately.
Last month, polling released by Data for Progress showed that US voters overwhelmingly support the federal government taking strong action to curb the climate impact of Wall Street in order to prevent economic crises driven by the financing of fossil fuels and other risky, high-emitting sectors.
In response, Sierra Club financial advocacy campaign manager Ben Cushing issued the following statement:
“It is promising to see President Biden recognize the enormous systemic risks of the climate crisis and call for sweeping action to protect the U.S. economy, the financial system, and the planet. The Biden administration affirmed today it recognizes that corporate disclosure and voluntary commitments alone are not sufficient for addressing systemic climate risks and that regulators must act. The IEA affirmed this week that in order to achieve President Biden’s goal of net-zero emissions before 2050, there can be no financing of new fossil fuels starting now — but U.S. financial firms continue to be world’s largest financiers of fossil fuels and climate destruction. Regulators have the tools to rein in these risky, dirty financing activities and safeguard our communities, and they need to use those tools now. These actions have the strong backing of the American people, who support a bold climate agenda and action to prevent another financial crash caused by Wall Street’s short-sighted gambles.”
About the Sierra Club
The Sierra Club is America’s largest and most influential grassroots environmental organization, with more than 3.5 million members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.