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Climate Change – A Systemic Financial Risk

Climate Change – A Systemic Financial Risk

Public leaders and investors have increasingly become concerned about the need for addressing the changing climate in the US, particularly after the catastrophic impact of COVID-19.

Recently, a group of leaders and investors have written letters to the US financial regulator to address the problem as a systematic financial risk. The US financial regulators include heads of Securities and Exchange Commission, the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Commodity Futures Trading Commission, the Federal Insurance Office, the Federal Housing Finance Agency, the Financial Stability Oversight Council, and state insurance regulators.

It comes in the wake of a recent report from CERES. This non-profit sustainability advocacy group stated that climate change is something that will impact the entire US economy at large. The report also warned the regulators that if the concern was not catered to immediately, it could lead to disruptive consequences.

The letters were written to the financial regulatory authorities demonstrate that climate change is a critical issue for private as well as public leaders and investors which include California State Teachers’ Retirement System, the California State Controller’s Office, the New York State, and New York City Comptrollers, and the Maryland State Treasurer.

The letter has been written with the hope that heads of various US regulatory authorities take appropriate action to manage and mitigate the impending crisis.