The Biden government is faced with the daunting task of rebuilding international alliances that have frayed in recent years. Expect renewed global climate cooperation to happen quickly, both in prominent settings like the Paris Agreement and in quieter diplomatic efforts, said Rajiv Shah, president of the Rockefeller Foundation and former head of the U.S. Agency for International Development.
These diplomatic moves, “coupled with the running of large corporations and large financial institutions,” would be “a tremendous asset,” he said.
Economy & Economy
Updated
Apr. 11, 2020, 6:16 pm ET
In terms of the private sector, the financial industry could help realign government policy, said Ariel Meyerstein of Citi. “There’s an entirely different infrastructure out there in the financial sector that we’ve been reviewing for a couple of years,” he said. The government could help set standards for investors who pursue environment, society and governance (ESG) goals, he added. When it comes to corporate climate risk disclosure, it would have a bigger impact, he said:
“As we know, there is a dizzying range of standards in ESG and sustainability reporting. We could use alignment there. There are a lot of things that you can call Track II diplomacy or just regulatory engagement that happens in a very robust way in normal times and doesn’t require legislative or administrative action or executive orders or pronouncements. It’s just about coordinating with our colleagues around the world. I think all of this is pretty important. “
The mandatory disclosure of climate risks by publicly traded companies appears to be a “high priority” for the Biden administration, said Rostin Behnam, commissioner at the Commodity Futures Trading Commission. “That’s probably the first thing people think of when they think of climate change and the financial markets.” A new report from the CFTC clearly outlined the risk of climate change to financial stability and explained how the next government could use its findings:
“One of the strongest and most frequently quoted statements at the beginning of the report – which can be viewed or used as a starting point for Day 1 in a new administration – is that climate change is a major risk to the stability of the US Financial system. And I think that in itself will change the way financial regulators think about climate change. “
