In 2020, a report commissioned by the Commodity Future Trading Commission, the federal regulators overseeing the nation’s commodities markets, concluded that climate change threatens U.S. financial markets, as the costs of wildfires, storms, droughts and floods spread through insurance and mortgage markets, pension funds and other financial institutions.
The report includes recommendations for new corporate regulations and the reversal of at least one Trump administration policy. It emphasizes the need to put a price on carbon emissions, and calls for the reversal of a proposed rule being put forward by the Trump administration’s Labor Department that would forbid retirement investment managers from considering environmental consequences in their financial recommendations.
The report also suggests that bank regulators should roll out a climate risk stress testing pilot program. The authors also recommend that another financial regulator, the Securities and Exchange Commission, strengthen its existing requirements that publicly traded companies disclose the risks to their bottom lines associated with climate change.