Climate change is an “emerging threat to the financial stability of the United States,” Stephen Ledbetter, the executive director and director of policy at the FSOC, said during a call with reporters Thursday.
The council’s report comes just 10 days before the United Nations Climate Change Conference, or COP26, is set to start. The international talks will take place in Glasgow.
“This report makes it clear that financial regulators understand the need for action to ensure that the climate crisis doesn’t cause the next financial crisis,” said Ben Cushing, manager of the Sierra Club’s Fossil-Free campaign, said in a statement.
He emphasized that the FSOC board left out “key risk-reduction tools,” which makes the report more vague and fails to treat climate change “with the urgency it deserves.”
“On top of the threats from climate change itself, climate solutions will threaten financial stability if regulators don’t steer finance in a more productive direction,” Da Arkush, the director of Public Citizen’s Climate Program, told CNN Business.
“As of now, Wall Street is aggressively financing fossil fuels,” he added. “Investments that will become worthless as we make progress on climate targets.”
The International Monetary Fund recently shared the same sentiment with CNN Business. Tobias Adrian, the director of the IMF’s monetary and capital markets department, said the climate crisis could “absolutely” ignite a financial crisis.