Tell the Fed: You can't afford to ignore climate change any longer

The Federal Reserve Board

The Fed is America’s central bank and most powerful financial regulator. It's responsible for fighting inflation, promoting full employment, and keeping our financial system safe and stable. But the Fed is ignoring climate change, and the risk it poses to our economy. And that's a BIG problem.

Big banks are investing in, and profiting from, fossil fuels and climate chaos. Since the Paris climate agreement was signed, US banks have invested more than $4.6 trillion into fossil fuels.

And it’s dangerous for the Fed to ignore big problems in the banking sector. In 2008 the Fed allowed big banks to make risky decisions, and ignored the warning signs in the subprime mortgage market. Banks got rich, the economy crashed, and millions of Americans lost their jobs, homes, and more in the great recession.

Sign our petition demanding the Fed release strong climate guidelines for big banks.
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To: The Federal Reserve Board
From: [Your Name]

Jerome H. Powell, Chair
Lael Brainard, Vice Chair
Michael S. Barr, Vice Chair for Supervision
Michelle W. Bowman
Lisa D. Cook
Philip N. Jefferson
Christopher J. Waller

We, the undersigned, urge the Federal Reserve Board of Governors (Fed) to follow the lead of the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) and issue climate-related risk management principles for the large banks under its supervision.

Climate-related financial risks to banks' safety and soundness are well-documented and accelerating. These risks include the physical impacts of climate change on communities, households, and businesses and the transition risks that arise as society reorients toward a clean energy economy. The Fed has a mandate and responsibility to address climate-related financial risks to banks.

The Fed’s climate supervisory principles should advise banks to:
* Take a whole-of-business approach to mitigating climate risk;
* Consider appropriate time horizons for assessing and addressing climate risk;
* Conduct robust climate scenario analysis modeling and review results with bank supervisors;
* Align internal strategies with their public climate commitments, both of which should be guided by science-based metrics and targets;
* Respect Indigenous rights and ensure the projects and companies they fund uphold Free, Prior, and Informed Consent and tribal sovereignty; And
* recognize where and how risk-management measures could have adverse effects on low-income and marginalized households and communities, and take steps to understand and fully mitigate these risks.

The Fed’s principles should also recognize that continued financing of greenhouse gas emissions by supervised banks is exacerbating climate-related financial risk by directly increasing transition risk and contributing to physical risk, both of which in turn threaten their own stability and that of the financial system as a whole.

In addition to joining the OCC and FDIC in publishing supervisory principles, the Fed should work with them to follow up soon with more detailed guidance.