Comments to the Commodity Futures Trading Commission on the proposed creation of a carbon markets subcommittee of the Energy and Environmental Markets Advisory Committee

The following is an edited comment letter that was submitted to the Commodity Futures Trading Commission (CFTC, or Commission) on September 22nd for the invitation to comment on the proposal by the Commercial Energy Working Group to form an EEMAC carbon markets subcommittee.[1] The proposed stakeholder group would produce a report on principles for designing the derivatives […]

Nature’s locus standi: Taking the Environment to Court

With institutions, both public and private, defining the functioning of major world economies, we have come a long way from the early days of industrialization to extensive urban development and technical advancement. In this developmental process, vital players in the economy seem to have neglected the importance of safeguarding the natural environment. Actions of individuals, […]

Do Extreme Weather Events Alter Investors’ Support for the Environment?

Dramatic images showing icebergs melting, global warming-related avalanches, and destructive landslides and wildfires caused by extreme weather events are now commonplace in news broadcasts. It is no surprise then that climate change-related corporate proposals have increased steadily in recent years, reflecting growing investor demand for corporate accountability around this issue. Given such a stance, what […]

The Global Green Finance Index

Background Just a few years ago, green finance was dismissed as a fringe activity. However, the rise of new financial instruments – such as Green Bonds and Fintech applications which reduce risk and open up new markets – has firmly moved green finance into the mainstream. When combined with public concern on climate change and policy makers’ preoccupation with low-carbon economic growth, it […]

Where the Rubber Meets the Road: How Can an SEC Climate Risk Disclosure Rule Survive Cost-Benefit Analysis?

In a recent post, we summarized comments submitted to the Securities and Exchange Commission (SEC or Commission) regarding the request for public input on climate change disclosures (RFPI) released by then Acting Chair, Allison Herren Lee on March 15, 2021. With the Commission set to release a Notice of Proposed Rulemaking on climate disclosure by […]

Summary of Comment Letters for the SEC’s Climate Risk Disclosure RFI

Recognizing that “investor demand for, and company disclosure of information about, climate change risks, impacts, and opportunities has grown dramatically,” former Securities and Exchange Commission (SEC or Commission) Acting Chair Allison Herren Lee released 15 questions for consideration on March 15, 2021 “with an eye toward facilitating the disclosure of consistent, comparable, and reliable information […]

SEC Climate Risk Disclosure Comment Letter: Executive Summary

Climate change poses serious risks to almost every aspect of the economy, and its impacts will have long-term disruptive effects on financial markets around the world. Currently, these risks are not adequately addressed by financial regulators in the United States. As a result, climate-related information is not accurately incorporated into financial markets, leaving firms, investors, […]

Recent Risk Alert Highlights Need for SEC Action Regarding Potential Greenwashing by Financial Firms

On April 9th, the SEC’s Division of Examinations issued a “Risk Alert” regarding three types of financial firms – investment advisers, registered investment companies, and private funds – that offer Environmental, Social & Governance (“ESG”) products and services. The Examinations Division is prioritizing review of ESG practices in response to the rapidly growing demand by […]

Climate Change Risk and the Costs of Mortgage Credit

A new challenge: pricing climate risks  In recent remarks, financial regulators across the globe have stressed the importance of understanding the effect of climate risks on the financial system. In a statement released on November 9, 2020, Governor Lael Brainard of the U.S. Federal Reserve stressed the importance of lenders’ abilities to identify and measure the risks posed by climate change. In particular, she emphasizes the importance of moving “from […]

Burning Down the House: How Inadequate Climate Risk Disclosures and Information Asymmetries Threaten to Disrupt the U.S. Mortgage Market

This post first appeared on the Climate Risk Disclosure Lab’s website.  The physical effects of climate change are wreaking havoc across the United States as extreme weather events are increasing in severity and frequency. The 2020 summer wildfires in the western U.S. broke “almost every record there is to break,” and there has been a notable […]