President Joe Biden is set to issue an executive order that would require American companies to reveal any risks to them ostensibly posed by “climate change.”
The announcement came from Biden’s so-called “climate czar,” former Secretary of State John Kerry, though he did not discuss details contained within the order or when it would be issued, the Washington Examiner reported.
Still, the order will fulfill a campaign pledge to require companies to make public their emissions as well as risks climate change poses to them.
The Biden administration has already implemented several steps to empower agencies like the Treasury Department, the Commodity Futures Trading Commission, the Securities and Exchange Commission, and the Federal Reserve to address whatever risks climate change may pose to the U.S. financial system. And in March, the SEC sought guidance on how to set up procedures for making climate disclosures.
Biden’s climate policies have already created significant pushback from Republicans who have accused the White House of setting up a regime that will essentially make it more difficult to invest in the production of fossil fuels, which would, they argue, lead to hefty price increases for gasoline and energy.
During a virtual event last week hosted by the International Monetary Fund, Kerry admitted that making climate disclosures would affect how capital is allocated.
“Suddenly, people are going to be making evaluations considering long-term risks to their investment based on the climate crisis,” Kerry, a multimillionaire who often flies on private jets, said. “And that will encourage new investment, as well as laws in countries” including tax incentives to boost investment in clean energy, he added.
His remarks followed those of IMF Managing Director Kristalina Georgieva, who said that it is important for global financial institutions to make standardized climate disclosures.
“We have to make the invisible visible — the transition risk that banks are carrying because they’re invested in high-carbon activities that, over time, are going to be phased out and the physical risks, investments in highly vulnerable coastal areas or in agriculture that could be affected by floods or droughts,” said Georgieva.
She went on to claim that it is vital to understand the climate risks facing banks and corporations, adding that her organization seeks to test the risk levels in order to find out how the global financial system responds. She also said large investment firms want climate disclosures so they can determine their risk as well.
The Obama-era SEC issued guidance in 2010 regarding climate disclosures but there was never any reporting mandate. Climate activists now say the Biden administration can rectify that.
“Raising the bar will help the market accurately price climate risk and further the competitiveness of American businesses on the evolving global stage,” Ben Ratner, a senior director at the Environmental Defense Fund, told the Examiner.
“Sector-level reporting guidance, including companies’ climate lobbying, are important elements of a robust U.S. response,” he added.
In early March, a dozen GOP-led states filed suit against the Biden administration over a climate-related executive order the president signed on Inauguration Day that sought to roll back several Trump-era policies.
“Manufacturing, agriculture, and energy production are essential to Missouri’s economy and employ thousands of hard-working Missourians across the state. Under President Biden’s executive order, which he didn’t have the authority to enact, these hard-working Missourians who have lived and worked this land for generations could be left in the dust,” Missouri Attorney General Eric Schmitt said in a statement.
“From higher energy bills to lost jobs, this massive expansion of federal regulatory power has the potential to impact nearly every household in this state – that’s why today I’m leading a coalition of states to put a stop to this executive order and protect Missouri families,” he added.
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