Despite the Acknowledgement of Impacts of Climate Catastrophe on Financial Markets, The Assessment Falls Short on Needed Action
WASHINGTON, D.C. – Tyson Slocum, director of Public Citizen’s Energy Program, and voting member of the U.S. Commodity Futures Trading Commission’s (CFTC) Market Risk Advisory Committee, issued the following statement after the release of a CFTC subcommittee report to a key financial regulator demanding the U.S. confront climate change’s emerging threats to the financial system:
This new report underscores the urgency and scope of the problems that climate change poses to the U.S. financial system. While we applaud the work contained in it, the recommendations fail to promote an effective CFTC authority that has gone unused: adjusting capital and margin requirements to properly reflect climate risks. Instead, the subcommittee conditions the “review” of capital and margin requirements only after regulators undertake “a program of research.”
The evidence already demonstrates that climate change poses systemic risk today. The report’s recommendations to other regulators are similarly stunted. Calls for further study dangerously delay needed action.
Many of the report’s suggestions – including adopting widespread corporate disclosure of climate risks – are important and admirable, but fall short of direct, immediate action financial regulators must take to mitigate the impacts of climate change on the financial system.
We look forward to working with our fellow Market Risk Advisory Committee members and the commission to use this report to advocate for immediate action to protect workers, retirees and families from systemic risks to financial markets posed by climate change.