10.21.21
On October 21, the Financial Stability Oversight Council (FSOC) voted to publish a new report on climate-related financial risk that acknowledges climate change is an “emerging and increasing” threat to financial stability. Included in the 133-page report is an outline of how the U.S. Securities and Exchange Commission (SEC) has begun to evaluate its disclosure rules and requested public comment on ways to improve climate disclosures relating to public companies and ESG funds—to provide investors with reliable, credible data and make better-informed, more efficient decisions on climate-related financial risks. Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell, and SEC Chairman Gary Gensler all voted to publish the report, while Federal Deposit Insurance Corporation (FDIC) Chairwoman Jelena McWilliams abstained. The FSOC’s new report follows an October 14 report released by the Biden administration detailing a government-wide strategy to assess and mitigate climate change’s financial risks to the U.S. economy. This strategy includes fortifying the U.S. financial system, life savings, and pensions against climate-related financial risk and utilizing federal procurement, management, budgeting, lending, and underwriting to address climate-related financial risk.