Opinion & Analysis

Addressing climate change has become a top priority for governments, policymakers, regulators, and concerned actors around the world. As a result, policies are changing, practices are evolving, data is being released, and calls for action are being proposed at a dizzying pace. This section highlights key resources for keeping up-to-date with climate-related disclosure practices, changes, and proposals.

Big City Mayors Around the World Call for Green Recovery

In a statement coordinated by the C40 Cities Climate Leadership Group, a network of nearly 100 of the world’s megacities committed to addressing climate change, dozens of mayors from the world’s most powerful cities have warned that the recovery from COVID-19 “should not be a return to ‘business as usual’ – because that is a world on track for 3°C or more of over-heating.” The statement, endorsed by the mayors of Los Angeles, Boston, Chicago, New Orleans, New York City, Portland, San Francisco, and Seattle, calls for… read more »

Trump Bans Oil Drilling Off Florida, Georgia, and South Carolina Coasts

On September 8th, Trump announced that he would sign an order extending the moratorium on offshore drilling on Florida’s Gulf Coast. He also announced that he will expand the moratorium to Florida’s Atlantic Coast, as well as the coasts of Georgia and South Carolina.  According to Politico, the move “is expected to be done by Presidential Memorandum,” and comes despite aggressive lobbying by the oil industry to “open the eastern Gulf of Mexico for oil and gas drilling when the current moratorium on exploration… read more »

SEC Commissioner Allison Herren Lee Criticizes Regulation S-K Amendment for Failure to Address Climate Change

On Wednesday, August 26th, the U.S. Securities and Exchange Commission approved an amendment to Regulation S-K that gives companies more flexibility in disclosing risk factors and certain legal proceedings in their financial statements by a vote of 3-2. Commissioner Allison Herren Lee, who in a January statement criticized the SEC for “ignoring” climate change, voted against the recent rule change because of its silence on “on two critical subjects: diversity and climate risk disclosures.” In a dissenting… read more »

Lee Reiners of the Climate Risk Disclosure Lab Quoted in Climate Wire Article

An article published by Climate Wire on August 24, 2020, highlights corporate watchdog Bharat Ramamurti’s criticism of the Fed’s “Main Street Lending Program.” Ramamurti accuses the central bank of tweaking the program’s parameters and “expanding loan eligibility to accommodate struggling oil and gas companies,” pointing to their decision to increase the maximum loan amount, to allow firms to use the new loans to pay off existing debt, and to remove certain eligibility constraints. These changes, which “opened the Main… read more »

Mnuchin Called to Address Climate Threats to Financial System

On August 19th, U.S. Representative Mike Levin (D-CA) and Senator Brian Schatz (D-HI) led a bicameral letter with nearly 50 House members and nine Senators calling on Treasury Secretary Steven Mnuchin to respond to the serious threat climate change poses to financial markets. The letter calls on Secretary Mnuchin to use his statutory responsibility as Chair of the Financial Stability Oversight Council (“FSOC”) to “respond to emerging threats to the stability of the United States Financial System,” noting that the FSOC’s… read more »

Environmental Organizations Press Fed to End Fossil-Fuel Bond Purchases

On July 30, 2020, a group of 69 organizations, including Amazon Watch and GreenPeace USA, expressed concern over the Fed’s failure to “fulfill its responsibility to serve the public interest and promote financial stability due to its investment in the fossil fuel sector.” The letter, addressed to Federal Reserve Chairman Jerome Powell, calls on the Fed to end its purchases of fossil fuel debt via the Secondary Market Corporate Credit Facility. The letter expresses the concern that the legal, financial, and climate risks… read more »

Rising Seas Threaten Millions Beyond Shorelines

A recent study published in Scientific Reports shows that, for the case of no coastal protection or adaptation and a mean RCP8.5 (business as usual) scenario, there will be an increase of 48% of the world’s land area, 52% of the global population and 46% of global assets at risk of flooding by 2100. Though average sea levels rise relatively slowly, the study concludes that other flooding risks, like high tides, storm surge and breaking waves, “will become much more frequent and more intense.” The study… read more »

Partnership for Carbon Accounting Financials Seeks Feedback on Carbon Measuring and Disclosure Standards

The industry-led Partnership for Carbon Accounting Financials, a global partnership consisting of 70 banks, asset managers, and insurance companies with nearly $9 trillion in assets, released a consultive draft for a Global Standard to measure and disclose the GHG emissions financed by loans and investments. The “Global Carbon Accounting Standard for the Financial Industry” responds to the increasing desire from banks and investors worldwide for a “clear and transparent set of rules to measure their financed… read more »

Former EPA Administrators Call for Agency Reset

Former EPA chiefs, from both Republican and Democratic administrations, call for a “reset” of the agency in light of increasingly threatening environmental challenges. Lee Thomas, William Reilly, Carol Browner, Christine Todd Whitman, Lisa Jackson and Gina McCarthy voiced their concern over the far-reaching impacts of climate change on “air quality, infectious diseases, and water quantity and quality.” They acknowledged that environmental injustices are “putting lower-wealth communities, communities of color, and indigenous… read more »

National Whistleblowers Center: Exposing a Ticking Time Bomb: How Fossil Fuel Industry Fraud is Setting Us Up for a Financial Implosion – and What Whistleblowers Can Do About It

In July 2020, the National Whistleblower Center (NWC) released a report detailing widespread deception by fossil fuel executives regarding the financial risks of climate change. The report describes why deception about companies’ preparedness for climate change risks represents a ticking time bomb that, if not addressed, could contribute to worldwide economic devastation. The report, written by a team of NWC experts, provides the first-ever analysis of legal strategies for exposing climate risk fraud by the… read more »

Global Financial Markets Center’s The FinReg Blog Special Issue: Climate Change and Financial Markets – Risk, Regulation, and Innovation

In July 2020, the Global Financial Markets Center’s The FinReg Blog launched a month-long special issue that reflects the complex, international, and interdisciplinary interaction between climate change, financial markets, and financial stability. The Climate Change and Financial Markets special issue includes scholarship and analysis from practitioners and researchers spanning multiple disciplines and institutional contexts. The pieces address distinct aspects of climate… read more »

SEC Commissioner Allison Herren Lee Statement on “Modernizing” Regulation S-K

In a January 2020 statement, SEC Commissioner Allison Herren Lee called on the SEC to stop ignoring the “challenge of disclosure around climate change risk,” and to “begin the difficult process of confronting it.” In her statement, Commissioner Lee highlights that investors are overwhelmingly expressing to the SEC their need for “consistent, reliable, and comparable disclosures of the risks and opportunities related to sustainability measures, particularly climate risk.” She also points to three problems that have… read more »

Institutional Investors Call on U.S. Regulators to Enact Climate-Related Regulation  

A large group of institutional investors, representing nearly $1 trillion in assets, called on U.S. regulators to consider climate change as a systemic threat to financial markets and the real economy. The letter, sent to the heads of every federal financial regulatory agency, states that climate change could have a “significant disruptive consequences on asset valuations and our nation’s economic stability” and urges regulators to “explicitly integrate climate change across [their] mandates.” The letter also calls on… read more »

New York State’s Pension Fund Divests from Coal Companies

New York State Comptroller Thomas DiNapoli announced in mid-July that the New York State Common Retirement Fund has divested from 22 thermal coal mining companies, stating that the companies are “not prepared to thrive, or even survive, in the low-carbon economy.” The Fund, whose assets total over $200 billion, pulled nearly $90 million from coal investments. DiNapoli also signaled that the Fund is in the process of evaluating the “low-carbon transition readiness” of companies in… read more »

Morgan Stanley to Disclose How Much Its Loans Contribute to Climate Change

Morgan Stanley recently committed to publicly disclosing the environmental impact of its loans and investments. The bank is also the first major U.S. bank to join the Partnership for Carbon Accounting Financials, a group of 66 formal members representing more than $5.3 trillion in assets who work to help facilitate the transition to net zero emissions, in line with the Paris Climate Agreement. Click here to read the statement. read more »

Climate Change as an Issue for Credit Ratings

In a 2019 article, Kristoffer Tigue of Inside Climate News assessed how credit rating agencies, specifically Moody’s, Standard & Poor’s, and Fitch Group, are “paying more attention to global warming and its impact in the financial markets.” read more »