A group of 40 US investment managers representing almost $1 trillion in assets, and numerous sustainability-themed nonprofits have published letters to several regulators and authorities, urging them to become more active on addressing climate threats, and help lead a path to net zero emissions.
The signatories include sustainable investors such as Trillium Asset Management, Boston Common Asset Management, among many others, as well as numerous pension, state and municipal asset managers, and 17 sustainability advocate groups including Ceres, Rocky Mountain Institute, among other businesses and individuals. The letter was sent to the leaders of the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Insurance Office, the Federal Housing Finance Agency, the Financial Stability Oversight Council, and various state insurance regulators.
The letter frames the climate crisis in the context of the systemic threat it poses to the financial markets and the economy, and the potential disruptive impact of climate on asset valuations and the country’s economic stability.
In doing so, the letter advocates for action on behalf of the recipients, which would fall under their mandates to protect US market stability and global competitiveness. Specifically, the signatories urge the regulators to guide the transition to a net zero future.
Adding a sense of urgency, the letter advocates for immediate action, in the face of the added vulnerability to economic shocks caused by the ongoing COVID-19 pandemic, and the decisions being made to help the economy recover. According to the letter:
“We call on you to immediately consider whether decisions being made right now could inadvertently exacerbate the climate crisis. Additionally, we ask you to implement a broader range of actions to explicitly integrate climate change across your mandates. Such actions are needed to protect the economy from any further disruptive shocks.”
The letter continues to suggest a series of steps that can be taken to begin addressing the climate crisis, as outlined the recent Ceres report “Ceres report, “Addressing climate as a systemic risk: A call to action for U.S. financial regulators.”
Some U.S. government departments have come under pressure recently due to actions that have been seen to be climate-action regressive, rather than progressive, such as a recent rule proposed by the Department of Labor that would put stricter limits on ESG-themed investing private employer-sponsored retirement plans. These actions come in contrast to the much more proactive European Union, who yesterday agreed on a budget and recovery program that includes substantial funding for climate action and the transition to carbon neutrality.
Click here to see the letter and full list of signatories