The first Earth Day may have been in 1970 – 51 years ago – but it seems like the financial markets are just now taking notice.
The financial markets took several key steps over the past few months to address climate change risks and help investors, regulators and business leaders report on them:
1. The Federal Reserve recently declared climate risk and systemic financial risk, on March 19, 2021, stating, “Climate change-related financial risks pose both micro- and macroprudential concerns…[and that]We believe that climate change increases financial stability risks.”
2. The Federal Reserve established a Climate Committee to provide guidance to the Fed on managing this systemic climate risk. In her speech announcing it, Federal Reserve Governor Brainerd stated,…