SAN FRANCISCO/WASHINGTON (Reuters) – U.S. Senator Elizabeth Warren, a contender for the Democratic Party’s presidential nomination, is asking the biggest U.S. banks for details on their assessments of and preparations for risks related to global warming.
“To protect themselves and the economy from climate-driven catastrophes, large financial institutions must act quickly to address risks,” Warren, a frequent critic of big banks, said in letters sent on Tuesday to top executives at Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JP Morgan, Morgan Stanley, State Street and Wells Fargo.
“I write to ask for more information about the risks caused by the climate crisis on the financial industry and your institution’s practices, including what steps, if any, your institution is taking to adapt to mitigate these risks,” she said in the letters, provided to Reuters.
She asked for detailed written responses by Feb. 7.
Over the past year a surge in natural disasters caused or exacerbated by warming temperatures, including bushfires in Australia, have driven climate change up the political agenda around the world and sparked protests demanding action.
The threat has caught the attention of financial regulators concerned with how rising seas and other consequences of the build-up of human-generated greenhouse gases could impact financial stability by, for instance, eroding the value of homes against which banks have lent hundreds of billions of dollars.
Regulators are also focused on assessing the potential impact of political responses to climate change on bank profitability and even viability, even as the world’s largest banks are increasingly targeted by activists for providing funding to fossil-fuel intensive industries, a major contributor to global warming.
Led by the Bank of England, dozens of central banks have called for better disclosure of risks related to climate change and have begun mapping out approaches to banking sector supervision that take such risks into account.
At its first-ever conference on climate change and economics last November, the U.S. Federal Reserve signaled it too may look at how to incorporate climate change risk into its assessments of financial stability. A panel convened by the Commodities Futures Trading Commission has begun its own effort to examine climate threats to the financial system.
But overall, U.S. financial regulators lag their peers abroad.
The current Republican U.S. administration has played down research on the risks of global warming and rolled back regulations designed to limit greenhouse gas emissions.
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