Warren presses big-bank CEOs on climate change policies
WASHINGTON — Sen. Elizabeth Warren of Masschusetts is seeking details from the eight U.S.-based global systemically important banks on their plans to address the risk climate change poses to financial institutions.
“The climate crisis demands that banks accurately estimate and mitigate risks to social and economic stability; it also presents mutually beneficial investment opportunities, particularly in climate-resilient urban infrastructure,” Warren, a leading candidate for the Democratic presidential nomination, said in a letter Tuesday. It was addressed to the CEOs of JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs, Wells Fargo, Bank of New York Mellon, Morgan Stanley and State Street.
Warren asked that the banks respond to several questions by Feb. 7, including whether they “formally assess the system risks that climate change” could pose to assets and investments, whether they support the Federal Reserve's running stress tests to measure how financial institutions would cope with climate-related financial risks and how the Climate Change Financial Risk Act of 2019 would affect each of the banks’ businesses.
That bill — which was introduced by Sen. Brian Schatz, D-Hawaii, and co-sponsored by Warren — would instruct the Fed to form an advisory group of climate scientists and climate economists to help develop climate-change scenarios for the financial stress tests.
In her letters to the eight banks, Warren cited the Federal Reserve Bank of San Francisco’s November conference on the economics of climate change and a series of papers the bank published in October warning about the negative economic effects of climate change, especially on lower-income communities.
One of those papers the San Francisco Fed published also warned about continuing flood risks and decried the lack of any methods to accurately assess up-to-date flood risks to inform lending practices.
“While some central banks around the world are taking action to confront climate-related risks to the global financial system, U.S. regulators continue to ignore the risks, despite the San Francisco Fed's groundbreaking work,” Warren wrote.