A letter signed by executives from pension plans and other major investors warned the Federal Reserve and other agencies of the financial risks of climate change. President Trump has called global warming a hoax, and he has reversed nearly 70 environmental rules, with another 30 in progress. Ceres knows that climate change is the biggest sustainability issue of our time, affecting everything from our economic systems to our political security to the availability of food and … Last month, Democrats on the House Select Committee on the Climate Crisis released a report that echoed some of the recommendations from Ceres, particularly ones regarding the disclosure of financial risks. The Low Carbon/Clean Energy Investment Working Group works with investors on managing carbon asset risks and opportunities for low-carbon and clean energy investments. “For a politically and sectorally diverse group of influential members advising the Trump administration to issue such a strong call for regulatory action is testament to just how important a financial issue climate change is, and to just how urgently we need leadership now,” Lubber added. Financial regulators should act to avoid economic disaster, according to a letter from pension funds and other investors representing almost $1 trillion in assets. September 10, 2020 /3BL Media/ - A subcommittee of the U.S. Commodity Futures Trading Commission’s (CFTC) Market Risk Advisory Committee issued its first-ever climate risk report today, “underscoring how serious a systemic financial threat climate change poses to U.S capital markets, and how concerned stakeholders from across the political spectrum are about it,” said Mindy Lubber, Ceres’ CEO and President and a member of the CFTC subcommittee. Regulators who are responsible for safeguarding this stability should address and act on climate change. The letter was signed by some of the largest pension funds in the country, including the California State Teachers’ Retirement System, or CalSTRS, which manages $246 billion; the New York City Comptroller’s Office, which oversees pension funds worth $206 billion; and the New York State Comptroller’s Office, which manages the state’s $211 billion retirement fund. California Comptroller Betty T. Yee, a Ceres board member, also called on financial regulators to act on climate change in an op-ed published in Barron’s Magazine. At its core are two demands: that the agencies treat climate change as a systemic risk, and that the S.E.C. In August, the U.S. Senate released The Case for Climate Action: Building a Clean Economy for the American People, showcasing the economic impacts of climate change. Ceres was founded in 1989 when Joan Bavaria, then-president of Trillium Asset Management, formed an alliance with leading environmentalists with the goal of changing corporate environmental practices.
“We do a lot of engagement with companies individually,” Ms. Gordon said. “At Ceres, we are committed to driving and accelerating transformative change within U.S. financial regulatory agencies through the Ceres Accelerator for Sustainable Capital Markets. With more than 70 Investor Network members participating, the working group has organized investor teams to begin engagements with 32 North American focus list companies, and will be coordinating and supporting these engagements. The release of the report follows a recent surge of alarm bells sounded by major capital market leaders regarding the urgent need to regulate climate change as a systemic financial risk. Influential investors from leading asset management firms, public pension funds, labor and socially-responsible investment funds, foundations, endowments and family offices make up the Ceres Investor Network. Ceres is a 501(c)(3) tax-exempt nonprofit organization registered in the US under EIN 223-053-747 Now, he said, “think about the climate risks.”. UPDATE: The Ceres 2020 Conference in New York is going digital. The letter on Tuesday suggests that those recommendations have significant support among investors as well. The letter calls on regulators to adopt the steps Ceres outlined last month in a report that makes 51 recommendations to eight federal agencies. The report, Managing Climate Risk in the U.S. Financial System, was produced by the Climate-Related Market Risk Subcommittee, a nonpartisan, cross-sectoral group of members advising the CTFC, an agency to the federal government whose mission is to “promote the integrity, resilience, and vibrancy of the U.S. derivatives markets through sound regulation.” It recommends that financial regulators “incorporate climate-related risk into their mandates and develop a strategy for integrating these risks in their work, including into their existing monitoring and oversight functions.” It makes a series of recommendations to be implemented by a broad array of financial regulatory agencies, and calls for a price on carbon pollution. Ceres 2020: Investors Summit on Climate Risk | Mission Investors Exchange Investors worry that if regulators do not act, climate change may cause the price of some companies to fall suddenly, the effects of which may ricochet through the economy. “You see very credible central banks, like the Bank of England and the European Central Bank, taking the risk of a climate calamity into their mission in a very disciplined and structured way,” Ms. Raskin said.
The Investor Initiative for Sustainable Forests works with investors to assess investment risks and opportunities associated with deforestation and develops effective strategies for engaging with companies whose practices contribute to global greenhouse gas emissions. Ceres welcomes climate risk report First ever climate risk report is issued from the subcommittee of CFTC and finds climate change poses a major financial risk to U.S. economy. “Every medium and large business has bank loans and has insurance,” said Steven Rothstein, managing director of the Ceres Accelerator for Sustainable Capital Markets, a group that works with investors and which organized the letter. WASHINGTON — Climate change threatens to create turmoil in the financial markets, and the Federal Reserve and other regulators must act to avoid an economic disaster, according to a letter sent on Tuesday by a group of large investors. Join a network of influential investors that is advancing sustainable investment practices and decision-making to build an equitable, sustainable global economy and planet. stability,” and showed more than half are already acting to monitor and address climate risk. ©2018 Ceres. (For Ceres Investor Network members only). “By and large, regulators try to stay out of controversy.”, Still, Mr. Curbelo said the need to act was clear. The North American working group of Climate Action 100+ was launched in November, 2017. Still, during the Trump administration, even agencies that are meant to have a degree of independence from the White House have been reluctant to address climate change. Julie Gorte, senior vice president for sustainable investing at Impax Asset Management, which manages $23 billion, said the S.E.C. Some of our key investor coalitions and initiatives include the Global Investor Coalition on Climate Change, Climate Action 100+ and The Investor Agenda. Formerly known as the Investor Initiative for Sustainable Exchanges, it will mobilize around opportunities to bring such disclosure to scale. According to Ceres, regulators can adopt each of its recommendations without new legislation from Congress. @CFTC subcommittee issues its first-ever climate risk report, as calls to regulate climate change as a systemic financial risk grow louder: https://bit.ly/32hZu7K, Managing Climate Risk in the U.S. Financial System, Ceres Accelerator for Sustainable Capital Markets, Addressing Climate Change as a Systemic Financial Risk: A Call to Action for U.S. Regulators, Ceres Set to Launch New 10-Year Action Plan for Sustainable Business Leadership, Amid Pandemic and Worsening Climate and Water Crisis, the Sustainability Movement Grew Stronger, New SEC Rule Will Impair Investors' Ability To Manage Risk at a Time of Mounting Systemic Risks, Investors and Labor Leaders Find Hope for Workers in Recovery Efforts to Build Back a More Sustainable Economy, Global Environmental Expert Ma Jun: “Market-based Solutions Are the Best Way to Balance Economic Recovery and Climate Action.”, Business Disruption and a Just Transition. In June, the Ceres Accelerator for Sustainable Capital Markets issued a report, Addressing Climate Change as a Systemic Financial Risk: A Call to Action for U.S. Regulators, recommending more than 50 specific … For more information, visit ceres.org and follow @CeresNews. Lubber is also a former regulator, having served as a regional administrator for the U.S. Environmental Protection Agency under the Clinton administration. “But that’s not going to solve the broader problem.”. Nevertheless, Ceres’s recommendations offer a blueprint for how a Democratic administration might begin to tackle climate change, should former Vice President Joseph R. Biden Jr. win the presidency in November. Providing more information about that risk — for example, by requiring companies to disclose more about their greenhouse gas emissions, or which of their facilities are at risk from rising seas — could help investors make better decisions. “That will help all investors.”, Another useful change, Mr. Rothstein said, would be for the Fed to require banks to examine the climate vulnerability of the companies they lend money to. ensures mandatory and consistent disclosure of climate threats facing companies. The Policy Working Group works with investors to engage federal and state policymakers on key climate, clean energy and water policies.
While the changes don’t require congressional approval, the objections of some Republican lawmakers to acting on climate change have had a chilling effect on regulators, said former Representative Carlos Curbelo, Republican of Florida, who signed the letter. All Rights Reserved. That, in turn, might encourage companies to lower their emissions, or risk losing access to investment or affordable insurance coverage. should force companies to disclose the location of their physical assets, such as factories and other facilities. In July, investors with nearly $1 trillion in assets under management joined with a bipartisan collection of former members of Congress, former regulators, heads on companies, philanthropic foundations, and advocacy organizations to urge the heads of the Federal Reserve, the Securities and Exchange Commission, and other U.S. financial regulatory agencies to act on climate change as a systemic financial risk, and to consider implementing the recommendations of Ceres’ report. In June, the Ceres Accelerator for Sustainable Capital Markets issued a report, Addressing Climate Change as a Systemic Financial Risk: A Call to Action for U.S. Regulators, recommending more than 50 specific actions financial regulators should take to incorporate climate change across their mandates.
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