Executive Order Launches Action on Financial Risks

On May 20, 2021, the president signed an Executive Order on Climate-Related Financial Risk. The order directs the Director of the National Economic Council and the National Climate Advisor to develop, within 120 days, a government-wide strategy on measuring, assessing mitigating and disclosing climate-related financial risks to government programs; financing needs associated with achieving net-zero greenhouse gas emissions by 2050; and areas in which private and public investments can complement each other to meet those needs. The order also directs the Treasury Secretary, as the Chair of the Financial Stability Oversight Council, to work with Council members to issue a report within 180 days on efforts to integrate consideration of climate-related financial risk into the policies and programs of the agencies that sit on the Council. The order further directs the Labor Secretary to report within 180 days on efforts to protect life savings and pensions from climate-related financial risks, and launches efforts to incorporate climate-risk considerations into federal lending, underwriting, and procurement.