Federal financial regulators would be required to take several steps to assessing climate change risk – including ensuring the appropriate measurement and mitigation of risks involved, according to an executive order signed by President Joe Biden (D) Thursday.
According to the “Executive Order on Climate-Related Financial Risk,” the Treasury secretary is ordered to work with members of the Financial Stability Oversight Council (FSOC) to consider “assessing, in a detailed and comprehensive manner, the climate-related financial risk, including both physical and transition risks, to the financial stability of the Federal Government and the stability of the U.S. financial system.”
The order also directs the Treasury secretary to facilitate sharing of climate-related risk information between FSOC member agencies and other areas of the federal government as needed.
A report is mandated from Treasury within the next 180 days on efforts by the federal financial regulators to incorporate climate-related financial risk into their policies and programs. The report, according to the order, should include recommendations on how identified climate-related financial risks can be mitigated, “including through new or revised regulatory standards as appropriate.”