Feinstein Applauds G7 Commitment to Confront Climate Financial Risk


Washington—Senator Dianne Feinstein (D-Calif.) today released the following statement after G7 finance ministers committed to moving toward mandatory disclosure of climate-related risks by financial institutions:

“The G7 members’ decision to move toward mandatory, more standardized disclosure of financial institutions’ climate-related risks is a welcome development.

“We need greater transparency when it comes to the financial risks posed by climate change, as well as improved international coordination. That’s why I introduced in March the Addressing Climate Financial Risk Act.

“The reality is that climate change is already causing and exacerbating natural disasters that have a profound effect on our financial system. In California, where wildfire and drought pose tremendous threats to our population as well as our economy, we understand that all too well.

“Wildfires are making property insurance unaffordable and less available. Drought is making it harder for farmers to grow their crops. And sea-level rise is threatening homes and critical infrastructure.

“Every G7 country must do more to reduce carbon emissions. But we must also guard against the risk that climate change already poses to our financial institutions and protect consumers from those risks.”

Background:

  • Senator Feinstein is author of the Addressing Climate Financial Risk Act, a bill to improve the ability of U.S. federal regulators to understand and mitigate risks from climate change within the financial system. Last month, President Biden issued an executive order that included several provisions of the bill, including requiring a report from the Financial Stability Oversight Council on the risks climate change poses to the financial system and a review of existing financial rules and guidance to incorporate climate risk.
  • In January, Senator Feinstein called on Treasury Secretary Janet Yellen to implement key provisions of the Addressing Climate Financial Risk Act including creating a permanent group of experts on climate financial risk, climate economics and climate change. Secretary Yellen subsequently created a “Treasury Climate Hub” to coordinate climate policy strategy, including with the Financial Stability Oversight Council.
  • Last September, Senator Feinstein called on the Treasury Department’s Federal Insurance Office to issue a report on the impact of increased wildfire risk due to climate change on private insurance markets. President Biden’s May executive order included requiring a report on the risks that climate change poses to insurance markets.
  • Last June, Senators Feinstein and Marco Rubio (R-Fla.) called on the Commodity Futures Trading Commission to include specific recommendations for addressing the financial risk of climate change in the report by its Climate-Related Market Risk Subcommittee that was subsequently released in September 2020.
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