Climate change is one of the greatest global challenges facing our society, and financial firms as global capital providers play a key role in financing the creation and deployment of solutions that mitigate greenhouse gas (GHG) emissions, promote green energy generation, and strengthen community resilience. As the new Administration takes shape, the financial services industry seeks to engage with incoming leaders and members of Congress on a bipartisan basis to help establish a shared vision for U.S. climate policy. By so doing, we hope to inform the policymaking process and demonstrate our willingness and capacity to support a pragmatic approach to transitioning to a more sustainable, and inclusive, low-carbon economy.
Climate change presents both risks and opportunities for the financial services industry. We must build reliable, consistent data sets, metrics, methodologies and standards to ensure that climate-related risks are appropriately understood, managed and disclosed. Transitioning to a lower-carbon economy will require the development of alternative fuels and new technologies, calling for trillions of dollars of investment in innovation and resilient infrastructure.
While individual institutions have a significant role to play in the global effort to address climate change, policy must provide a critical foundation. That is why—as leading financial services trade associations—we have developed a set of Principles for a U.S. Transition to a Sustainable Low-Carbon Economy.
These Principles are intended to serve as a useful framework, offering perspectives from the full spectrum of the financial services industry including banks, investment banks, insurers, asset managers, investment funds, pension funds and other financial intermediaries. These are not exhaustive but do represent essential building blocks that should encourage a pragmatic approach to the transition. The Principles are as follows:
While the challenges and risks of climate change are real, so too are the opportunities it presents. Together, we can spur innovation and mobilize capital so that the benefits are widespread. The shift to low-carbon growth will entail a significant transformation of the U.S. economy; the U.S. should move ahead quickly but deliberately, supporting robust, sustainable economic growth, investment, and job creation to minimize the costs of transition for households and businesses.