The PRI welcomes the reintroduction of Senator Brian Schatz (D-Hawai‘i) and Congressman Sean Casten (D-Ill.)’s bill, which will ensure that the U.S. financial system is better prepared for the impact of climate change.

The proposed legislation will direct the Federal Reserve to conduct stress tests on large financial institutions to measure their resilience to climate-related financial risks. It also establishes an advisory group to help develop 1.5-degree, 2-degree and “business as usual” climate change scenarios for these stress tests. Additionally, the bill establishes a climate change risk committee within the Financial Stability Oversight Council.

In response to the reintroduction of both bills, Fiona Reynolds issued the following statement: 

“Climate change poses a systemic risk to our global economy. The reintroduction of the Climate Change Financial Risk Act of 2021 sets out a series of sensible and necessary requirements to better account for climate-related physical and transition risks in the U.S. financial system, including three stress-test scenarios for large financial institutions. We welcome Senator Schatz’s continued leadership in the Senate as the U.S. moves forward in a whole-of-government approach to address climate-related financial risks.”

A summary of the press release is available here.

Please contact [email protected] for questions or comments on this legislation.