Climate change threatens the stability of the United States and global financial systems—and, in turn, taxpayers, retirement savers, and working families who bear the overwhelming brunt of a financial crisis. Climate disasters will destroy the physical underpinnings of the economy. And when laggard companies make long-overdue shifts away from fossil fuels, it can disrupt traditional investment and financing strategies. Working families and communities of color will be hit first and worst. And yet, Donald Trump and his administration continue to double down on climate denial and inaction.
Unless the next president acts quickly, America could stand on the brink of a climate recession.
When a new president takes office in 2021, he will need to do more than roll back hundreds of Trump’s executive actions that deregulate and gut climate protections. Simply returning to the 2016 status quo will not solve the 2021 climate crisis. The longer our government waits to take action, the worse the outcomes will be for the stability of the financial sector, for the security of workers’ retirement savings, and for the economic well-being of every American.
The next president and administration must use its powers to rein in climate risk to our financial system, both to limit the contributions that the financial sector is making to climate risk by financing greenhouse gas pollution and to increase the resiliency of the financial system itself in the face of climate change.
In this new memo, we lay out five steps the next administration can take to do just that:
These steps do not require new legislation or new authority; they can begin on day one.