Financial Services Committee Holds Hearing on Climate Change Systemic Risk to Financial System, Uplifting Casten’s Two Bills on the Issue
Washington, DC – Today the House Financial Services Committee Subcommittee on Consumer Protection and Financial Institutions held a hearing on the grave and imminent threat climate change poses to the U.S. financial system—focusing on the dire need for federal regulators to build resilience within our banking and financial system to protect our broader economy.
Of the three bills noticed for the hearing, two were introduced by U.S. Congressman Sean Casten (D-IL):
- H.R. 1549, the ‘‘Addressing Climate Financial Risk Act of 2021.’’, to improve the ability of federal regulators to understand and mitigate risks from climate change within the financial system.
- H.R. 3571, the ‘‘Climate Change Financial Risk Act of 2021. – to direct the Federal Reserve (“Fed”) to conduct stress tests on large financial institutions to measure their resilience to climate-related financial risks.
The House Financial Services Committee’s decision to hold this hearing on addressing climate change financial risk weeks after the House passed Casten’s Climate Risk Disclosure Act signals both Congressional commitment to the issue and steadily increasing momentum from federal regulators, the Biden Administration, consumer protection and environmental stakeholders.
Casten said, “Last year, the oil companies wrote off $145 billion of assets in the first three quarters. As I pointed out recently, Exxon Mobil didn't write off all that money because they were ‘woke’ -- these are the types of transition risks that financial institutions need to account for. We are all facing deeper and wider exposures to climate change than we had thought."
To watch Rep. Casten’s remarks click here or on the image below.
Passing common-sense, market-based solutions to safeguard our financial system against climate change has been Congressman Casten’s top priority since his first day in Congress. By making updates to federal regulation that addresses systemic climate risk, we can protect the financial security of American families, investors and businesses against climate change while growing our economy and creating jobs.
Earlier this month, the House passed Casten’s Climate Risk Disclosure Act to require public companies to disclose information about their exposure to climate-related risks. Senator Elizabeth Warren (D-MA) has championed this issue alongside Casten, introducing the Senate companion bill, S.1217.
In May, President Biden announced an Executive Order directing federal agencies to analyze and mitigate the risk climate change poses to the economy. The executive order advanced priorities of three bills Casten introduced and included directives to:
- Develop a Whole-of-Government Approach to Mitigating Climate-Related Financial Risk,
- Encourage Financial Regulators to Assess Climate-Related Financial Risk,
- Bolster the Resilience of Life Savings and Pensions,
- Modernize Federal Lending, Underwriting, and Procurement, and
- Reduce the Risk of Climate Change to the Federal Budget.
A fact sheet on the Executive Order can be found here.
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