On Thursday, May 20, 2021, US President Biden signed an Executive Order, entitled “Climate-Related Financial Risk” (Climate Risk EO), that sets the stage for the US federal government, including its financial regulatory agencies, to begin to incorporate climate-risk and other ESG issues into financial regulation. The Climate Risk EO further demonstrates the
On April 14, 2021, the Basel Committee on Banking Supervision (BCBS) issued two climate-related reports—one on climate-related risk drivers and their transmission channels and a companion report on measurement methodologies for financial risks. Among the reports’ findings:
- Banks and the banking system are exposed to climate change through macro- and microeconomic transmission
The past few weeks have seen a flurry of ESG-related announcements coming from the US Securities and Exchange Commission (SEC) Acting Chair and staff. The most recent press release announced that the SEC has created a Climate and ESG Task Force in the Division of Enforcement:
“[T]he Climate and ESG Task Force will develop initiatives to proactively identify ESG-related misconduct. The task force will also coordinate the effective use of Division resources, including through the use of sophisticated data analysis to mine and assess information across registrants, to identify potential violations.
The initial focus will be to identify any material gaps or misstatements in issuers’ disclosure of climate risks under existing rules. The task force will also analyze disclosure and compliance issues relating to investment advisers’ and funds’ ESG strategies.“
SEC registrants may be wondering if these announcements change their legal obligations and what actions they should take in response in order to ensure compliance. We discuss the implications for registrants in this Blog Post.
On February 24, 2021, Acting Chair of the US Securities and Exchange Commission (SEC), Allison Herren Lee, announced that the agency will focus on public companies’ climate change disclosures as part of an effort to both assess current compliance with federal securities laws and develop new disclosure requirements for climate change.
On January 27, 2021, President Biden signed Executive Order 14008, Tackling the Climate Crisis at Home and Abroad (the “Order”). The Order sets forth the Biden administration’s policies to address climate change through both foreign and domestic policies and demonstrates the administration’s intent to make addressing climate change a top priority for nearly…
On January 25, 2021, the European Central Bank (ECB) announced that it has set up a Climate Change Centre to bring together the work on climate issues in different parts of the bank.
The Climate Change Centre will shape and steer the ECB’s climate agenda internally and externally, building on the expertise of all teams already working on climate-related topics. Its activities will be organized in workstreams, ranging from monetary policy to prudential functions, and supported by staff that have data and climate change expertise.
The Climate Change Centre, with an expected staff of 10 people, will start its work in early 2021 and report to the ECB President, Christine Lagarde.