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Biden Orders Climate Risk Strategy for Financial Assets

Federal agencies are drafting rules to identify threats to government programs, assets, and liabilities; reduce risks to the nation’s financial stability; and bolster disclosures of climate risk.

By Jenny Leonard & Saleha Mohsin | May 21, 2021 at 03:14 PM

President Joe Biden is ordering his administration to create a strategy to quantify the risks climate change poses to both public and private financial assets.

In a four-page executive order that he signed Thursday, the president is asking Treasury Secretary Janet Yellen, in her role as head of the Financial Stability Oversight Council (FSOC), to recommend steps to reduce climate risks to financial stability, according to the administration. That assessment, which would be provided within six months, would also detail plans financial regulators have for bolstering disclosures.

A separate government-wide strategy for identifying and disclosing climate risk to government programs, assets, and liabilities is set to be developed within 120 days. It will be drafted by National Economic Council Director Brian Deese and National Climate Adviser Gina McCarthy in coordination with Yellen and the Office of Management and Budget (OMB). The Labor Department will be directed to analyze how to protect pensions from climate change risk.

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