Biden has promised a climate risk strategy for US financial assets in Business and Economic News

The enforcement order is the first step in the Biden administration’s efforts to reduce the risks to financial stability caused by climate change and to reduce long-term U.S. greenhouse gas emissions.

President Joe Biden has instructed his administration to create a strategy for estimating the risks of climate change to both public and private financial assets.

In a four-page executive order signed on Thursday, the president urges Finance Secretary Janet Yellen, as chair of the Financial Stability Supervision Council, to recommend steps to reduce climate risks to financial stability, according to the administration. This assessment, which would take place within six months, will also determine the financial regulators ’plans to strengthen their knowledge.

A climate strategy for the entire government will be developed within 120 days to identify and raise awareness of the risk to government programs, assets and liabilities. Brian Deese, director of the National Economic Council, and Gina McCarthy, national climate adviser, will write in coordination with Yellen and the Office of Management and Budget. The Department of Labor will focus on examining how to protect pensions from the risk of climate change.

“Our modern financial system was built on the assumption that the climate was stable, and this assumption prevailed primarily in existing financial models, and was based on how we invest capital, how we build society, and how we do it. predicted in the long term, “said Brian Deese, director of the National Economic Council, in a call with reporters on Thursday.

Wall Street governments, regulators and business leaders have been discussing how the financial industry should protect itself from environmental threats and provide companies with more information about these risks.

“The exacerbated effects of climate change pose a physical risk to assets, public trading securities, private investment and business,” Biden said in the order. “At the same time, this global change presents opportunities for generations to improve U.S. competitiveness and economic growth, while at the same time creating well-paid job opportunities for workers.”

The executive order is the first step in the new administration’s efforts to reduce the risks to financial stability caused by climate change and to achieve a longer-term goal of reducing U.S. greenhouse gas emissions.

By order of Biden, the OMB director, in consultation with other agencies, will identify the main drivers of federal climate risk exposure and the president will develop ways to quantify climate risk for long-term budget projections. The OMB and the Council of Economic Advisers will develop and publish an assessment of the government’s impact on climate risk.