New Report Shows Fed Failing to Address Climate Change, NGO’s join 25 Members of Congress Who Sent Companion Letter
Washington, D.C. — Today, 64 organizations sent a letter to Federal Reserve Chairman Powell, urging him to take action on climate-related risk and investment, saying “there is an urgent need for more significant financial regulatory responses to the climate crisis.” This letter comes as the new Green Central Banking Scorecard from PositiveMoney gives the Federal Reserve a D-, rating it among the bottom tier of G-20 central banks for its efforts to address climate change.
A group of 25 Members of Congress, led by Rep. Mondaire Jones (NY-17) and Rep. Rashida Tlaib (MI-13), sent a companion letter earlier today, saying “We write to share our concern over the limited action of the Federal Reserve (‘Fed’) to prepare our financial institutions and broader economy for the risk and destabilizing impact of climate change.” Their full letter is available online HERE.
In the letter, the climate and financial reform organizations told Powell, “The Federal Reserve Board has a crucial role to play in protecting the economy and the public from material risks, including those from climate change, as you highlighted in your November 2020 press conference. The threats posed by climate change, as outlined in the Fed’s most recent financial stability report, are significant and, to quote Governor Lael Brainard, ‘one of the major challenges of our time.’ We urge you to move more rapidly and more boldly with specific actions in supervision, micro and macroprudential regulation, monetary policy, the Board’s balance sheet, and community development.”
“It’s unthinkable that banks are still financing new fossil fuel development when we are crystal clear that we are on a path to climate chaos,” said Tracey Lewis, Senior Policy Analyst, 350.org. “The Federal Reserve must do its job, steering the economy away from disaster by ending fossil fuel finance.”
Public Citizen released a supplement to the Green Central Banking Scorecard that gives the context for the Federal Reserve’s D- grade and identifies what the Fed can do on climate change.
“This abysmal grade is a warning call – the Federal Reserve is falling behind on addressing the threats from climate change – but with swift action, the U.S. can jump to the head of the class,” said Yevgeny Shrago, policy counsel for Public Citizen’s Climate Program. “The Fed has the tools to support the ongoing transition to a clean energy economy, but so far it’s been all talk and no walk. Together, we’re urging Chairman Powell to take bold action and protect our economy from climate risk.”
Last week, a new report, Banking on Climate Chaos, showed that the largest banks in the world have continued to invest trillions of dollars in fossil fuels since the Paris Agreement, underscoring the need for urgent action from the Federal Reserve and other financial regulators.
“Since the Paris Climate Agreement, U.S. banks are the world’s four biggest lenders and underwriters to the fossil fuel industry, and six of the top 15, to the tune of $1.2 trillion over the past five years,” said Jason Opeña Disterhoft, Climate and Energy Senior Campaigner at Rainforest Action Network. “Wall Street is driving the climate crisis, and therefore threatening the safety, soundness and stability of the financial system. It’s well past time for the Federal Reserve to stop sitting on its hands. The Fed must fulfill its mandate by using the full range of its tools to stop Wall Street fueling climate risk.”
The NGO letter to Federal Reserve Chairman Powell is online HERE, and its full text and list of signatories are below.