FSOC Meets to Discuss Progress on Climate Related Programs

The Financial Stability Oversight Council (FSOC) convened to discuss progress made by the Council and its members to identify and address climate-related financial risk. During the meeting, SEC Chair Gary Gensler delivered remarks, noting the Commission embarked on several steps to respond to the call for further action on climate-related risk. Gensler stated the SEC proposed three rules over the past several months, including a rule focused on “advisers and investment companies marketing themselves using ESG-related labels.” He added, the purpose behind this rule is to ensure “investors can see the information that stands behind funds’ and advisers’ claims when labeling themselves as “green,” “sustainable,” “low-carbon,” and so on.“ As part of the meeting, the FSOC released a factsheet highlighting the progress of the Climate-related Financial Risk Committee, which has representation from all fifteen FSOC members. The factsheet outlines specific efforts by the SEC, the Federal Reserve, CFTC, and other financial regulators to address climate risk in the financial system. The factsheet also notes “FSOC members have identified work on data and methodologies as a priority” and as a result, the Office of Financial Research announced the launch of its Climate Data and Analytics Hub pilot program, “a new tool to help financial regulators assess potential risks to financial stability stemming from climate change.”

Click here to read the FSOC’s Factsheet on Progress in Addressing Climate-Related Financial Risk.