Financial Regulation
Banks, insurance companies and asset managers are the main financial backers of the corporations and activities driving climate change. Financial sector regulators have the authority and responsibility to curtail the flow of funds to greenhouse gas emissions and to encourage funding of climate resilience and of a just transition to a zero emissions economy.
values of Shareholders & Beneficiaries
Informed investors expressing their values
decisions of banks & insurers
Considering climate change for emissions-increasing industries
corporate transparency rules
Establishing multilateral solutions to strengthen global tax regulations
Disclose climate risk and protect investor rights
Require all firms to publicly disclose the greenhouse gas emissions they produce and finance, the risks their business faces from climate change, and their plans for addressing both.
01
Give shareholders and retirement plan beneficiaries the right to invest in assets that express their values and the information that they need to accurately assess those investments.
Implement prudential regulation of emissions financing
Use the tools designed to prevent bank failures and financial crises to manage the danger to the broader economy from financing emissions and deforestation commodities.
02
Take climate change into account when evaluating decisions by banks and insurers to lend to, underwrite, or invest in emissions-increasing industries.
03
The U.S. should lead by example and establish robust corporate transparency rules while strengthening regulation against tax avoidance and evasion at home.
Regulate Tax Havens
The existing global tax structure is antithetical to a just international climate transition. Tax havens, including those in the U.S., significantly undermine the revenue necessary to fund climate transitions, especially in lower-income countries; opaque corporate laws allow fossil fuel corporations and other greenhouse emitters to evade accountability for environmental and human rights abuses; and illicit financial flows enable global corruption, rendering governments less democratically accountable.[xxvi] To ensure an equitable international climate transition, the U.S. must therefore use its global influence to promote comprehensive multilateral solutions to the problem of tax havens.
Finance a just transition
Increase equitable investment in frontline communities. Do not permit climate risk-management to result in banks and insurers denying service or increasing costs to serve these communities.
05
Mitigate harm to vulnerable communities by encouraging banks to support climate resilience as part of their community reinvestment obligations.
04
Begin phasing down the financing of greenhouse gas pollution, starting with the most highly polluting sectors and companies.
Restrict financing of greenhouse gas pollution
Close loopholes that allow bank holding companies to invest in physical commodities and energy businesses and require that any future fossil fuel investments bear the full costs that they impose on the economy and the environment.
further sectors and topics
Economy-Wide Targets
Economic benefits to be created with a strong federal approach to lower emissions.