US regulators have made significant progress on climate-related risks, scorecard finds

December 18th, 2024

Ceres’ latest scorecard revealed that while the 10 US financial regulators have taken hundreds of actions over the last 18 months to address the systematic financial risks of climate change, significant work remains.

The assessment found that most regulators have made significant progress in producing research and data on climate risk, as well as integrating these risks into their oversight of regulated entities.

For example, the Federal Reserve System, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation issued final guidance on climate-related financial risk management for large institutions and incorporate climate resiliency and disaster preparedness provisions into the Community Reinvestment Act.

Meanwhile, the SEC finalised its landmark climate disclosure rule requiring all US public listed companies to report climate-related financial risks.

Steven Rothstein, managing director of the Ceres Accelerator for sustainable capital markets, said: “From initial hesitation to proactive strategies, there has been a meaningful evolution in the past four years with how these institutions approach climate-related financial risks,”

While US federal regulators are incorporating sustainability criteria, the scorecard highlights that more action is needed to address climate-related risks. Additionally, despite regulatory efforts, Republican politicians continue to criticize these initiatives.

This has been evidenced as the Republican-led House Judiciary Committee has accused Climate Action 100+ of conspiring to force out ExxonMobil directors.

The committee claimed that members of the group pressured BlackRock and State Street Global Advisors to join, despite both asset managers raising concerns that the initiative's 'collusion' and 'collaborative engagement' could violate federal law.

It also said that Climate Action 100+ colluded to get votes from BlackRock, State Street and Vanguard to oppose Exxon’s board members.

The committee has since threatened potential legislative reforms to address what it deemed as was anticompetitive behaviour from the group.

Minerva’s blog focuses on the latest developments in ESG investing and stewardship. Minerva is a global provider of sustainable stewardship solutions with over 25 years of expertise. Minerva empowers investors by providing essential tools, including ESG research and data, enabling them to navigate the intricate landscape of stewardship and proxy voting, whilst ensuring their decisions are well-informed and aligned with sustainable principles.

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