Claiming that it will help Americans better understand climate change's impacts on their financial security, President Joe Biden issued the Executive Order on Climate-Related Financial Risk on May 20. According to the White House, the EO will: 1.Develop a governmentwide approach to mitigating climate-related financial risk; 2.Encourage financial regulators to assess climate-related financial risk; 3.Bolster the resilience of life savings and pensions; 4.Modernize federal lending, underwriting and procurement; and 5.Reduce climate change risks to the federal budget. To encourage regulators to consider climate risks, the EO instructs Treasury Secretary Janet Yellen to work with the other members of the Financial Stability Oversight Council, which she chairs, to assess climate-related financial risk to the stability of both the federal government and the U.S. financial system, the White House describes. Additionally, Yellen is to work with the council's member agencies to consider issuing a report on actions the council recommends to reduce risks to financial stability, including actions member agencies plan to take to improve climate-related disclosures and other sources of data, and to incorporate climate-related financial risk into regulatory and supervisory practices.
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