In Testimony to New York Legislature, Public Citizen Calls for Real Action on Climate Financial Risk
ALBANY, NY — State regulators have a critical role to play in building resilience and developing safe and sound banking practices related to climate risk, Public Citizen expert David Arkush testified today before the New York State Senate Committee on Banks.
“Over the last few years, most have recognized, at least in principle, that climate change poses a threat to banks and the financial system,” said Arkush, managing director of Public Citizen’s Climate Program. “Regulators and legislators have a critical role to play in protecting the financial system, by directing banks to adopt a precautionary approach, and clarifying expectations about what that approach actually means.”
The hearing comes a day after the United Nations Intergovernmental Panel on Climate Change issued a report looking at the impacts climate change is already having on humans and nature. The report found that humans burning of fossil fuels has generated a measurable change in extreme weather, intensifying heat waves, rainfall, and storm surges.
“This report should be a wakeup call for banks and their regulators,” Arkush told the Committee. “[It] underscores the critical importance of banking regulators and legislators taking a precautionary approach to climate risk, one that phases out financing of greenhouse gas emissions in line with the IPCC’s climate targets while helping vulnerable communities navigate the transition.”
The Committee explored the impacts the climate crisis would have on banks and insurance companies. Late last year, the New York Department of Financial Services adopted guidelines instructing insurance companies to consider climate change in their operations. New York is the only state to explicitly direct insurance companies to manage their financial risks from climate change.