Banks, insurers move to shape climate debate as Washington crackdown looms
4 min read
The organizations described their "clear mandate" on climate finance in an unreleased and yet-to-be finalized report that they've been assembling since Joe Biden secured the presidency.
"Our customers, investors, employees and stakeholders — as well as voters and society at large — want our industry to respond to climate change," the associations said in the preliminary version of the report. "It is also increasingly clear that the industry must identify, measure and disclose the risks associated with climate change, both from our own operations as well as exposures via our clients." The companies "have a clear mandate to intermediate trillions of dollars to new industries, cutting-edge technologies and resilient infrastructure, building on our long-standing commitments to sustainable finance," the report says. The broad collaboration among the key industry groups — including many that have largely stayed quiet about the threat of global warming — reflects the dramatic turnabout in the climate finance discussion in Washington since Trump's defeat and the Democrats' stunning Senate victories that gave them control of Congress. Policymakers around the world are also increasingly concerned about the dangers that rising temperatures and natural disasters pose to financial firms' bottom lines, as well as the possibility that they could suffer destabilizing losses as governments shift to a low-carbon economy. While little was done in the U.S. during the Trump era, Democratic lawmakers and Biden's regulators are expected to impose sweeping climate rules on financial institutions, including mandatory disclosures of their climate risks. The discussions are sensitive for banks and insurers because their positions could inflame political tensions on both the left and the right. Environmental advocates argue that many of the steps that banks are supporting fall short of what activists see as the best solution — putting a halt to fossil fuel financing altogether. According to the Rainforest Action Network, 35 of the largest banks alone facilitated more than $735…