Treasury Secretary nominee Janet Yellen pledged to appoint a senior level official at Treasury to lead the department’s efforts on addressing climate change, at her nomination hearing before the Senate Finance Committee.

Yellen said:

“I will look to appoint someone at a very senior level to lead our efforts, and to create a hub within Treasury in which we particularly focus on financial system-related risks and tax policy incentives toward climate change. I think we need to seriously look at assessing the risks to the financial system from climate change.”

Addressing the risks to the financial system and to asset values created by climate change, Yellen stated:

“I think we should take these risks very, very seriously. I think climate change is an existential threat and both the impact of climate change itself and policies to address it could have major impacts, creating stranded assets, generating large changes in asset prices, credit risks, and so forth that could affect the financial system.”

Yellen’s comments mark another indication on the emphasis the incoming administration will place on climate change. President-elect Biden has clearly signalled his intention to place the US in the center of the fight against climate change. In addition to promising to rejoin the Paris Agreement immediately upon taking office, the Biden-Harris transition team has established climate policy as one of the incoming administration’s top priorities, and has made key appointments including Former Secretary of State John Kerry as Special Presidential Envoy for Climate – the first time the NSC will include an official dedicated to climate change – and sustainable investing veteran and Paris Agreement negotiator Brian Deese as Director of the National Economic Council.