Warren asks banks to assess their risk from climate change
Sen. Elizabeth Warren, D-Mass., sent letters Wednesday to the nation’s largest banks, asking them to share their plans for dealing with the risks posed by climate change.
“The climate crisis demands that banks accurately estimate and mitigate risks to social and economic stability; it also presents mutually beneficial investment opportunities, particularly in climate-resilient urban infrastructure,” Warren, a leading candidate for the Democratic presidential nomination, wrote to JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs, Wells Fargo, Bank of New York Mellon, Morgan Stanley and State Street Bank and Trust Co.
The National Oceanic and Atmospheric Administration’s annual climate assessment found that in 2019, climate-related disasters resulted in losses of over $1 billion in the United States.
Globally, climate-related losses totaled $45 billion, as sea levels continued to rise, and after severe flooding, hurricanes and record-setting wildfires.
“I write to ask for more information about the risks cause by the climate crisis on the financial industry and your institution’s practices, including what step, if any, your institution is taking to mitigate these risks,” Warren said in her letter.
At the World Economic Forum in Davos on Tuesday, President Trump mocked what he called the “perennial prophets of doom” on the subject of climate change.
“This is not a time for pessimism,” said Trump, who announced last year that he was pulling the United States out of the Paris climate agreement, adding, “Fear and doubt is not a good thought process.”
Greta Thunberg, the teenage climate activist, offered a starkly different assessment in her own speech at Davos.
“You say children shouldn’t worry. You say: ‘Just leave this to us. We will fix this, we promise we won’t let you down. Don’t be so pessimistic,’” Thunberg said Tuesday. “And then — nothing. Silence. Or something worse than silence. Empty words and promises which give the impression that sufficient action is being taken.”
Warren has proposed spending $3 trillion over the coming decade to fight climate change in the United States, and her letter to the big banks comes just months after the Federal Reserve Bank of San Francisco held a conference on the threat that climate change poses to the financial sector.
In a speech in November, Mary C. Daly, president and CEO of the Federal Reserve Bank of San Francisco, said, “Climate change is an economic issue we can’t afford to ignore.”
Warren, who co-sponsored a 2019 bill directing the Fed to conduct so-called “stress tests” of banks on their preparation for potential losses due to climate change, asked the financial institutions to respond to her letter by Feb. 7. She also asked the banks to state publicly whether they supported climate change stress tests.
“As climate change continues to affect our economy, it is critical to understand your bank’s adaptation and mitigation strategies,” she wrote.
An analysis issued in August by the National Bureau of Economic Research found that unless greenhouse gas emissions were reduced significantly and quickly, climate change could cost the United States up to 10.5 percent of its gross domestic product by 2100.
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