(November 23, 2020) Today, news outlets have reported that President-elect Biden plans to name Janet Yellen as Treasury Secretary. The president-elect won with an unprecedented climate mandate, and it is critical that Janet Yellen as Treasury Secretary does her part to fulfill that mandate by using the powers of the Treasury Department to act on the urgency of the climate crisis.
“We look forward to working with Janet Yellen in the coming months and years to use her power as Treasury Secretary to embark on a bold plan for climate action. Our 130+ member organizations, as well as the hundreds of thousands of climate activists around the country, will be ready to collaborate and, if needed, hold Yellen accountable to the urgency of the climate crisis,” said Alec Connon, Stop the Money Pipeline Coalition Coordinator.
Earlier this month, Stop the Money Pipeline (STMP), a diverse coalition of over 130 mainstream and grassroots climate groups committed to pushing financial institutions to end support for the fossil fuel and other climate-harming industries, sent a letter to President-elect Biden urging him to ensure all appointees to the Treasury Department and financial regulatory agencies like the Federal Reserve and the Securities and Exchange Commission reflect his campaign promises to comprehensively address the climate crisis, including transitioning the economy away from the industries driving climate change, namely fossil fuels and deforestation-risk commodities.
“Given the urgency and severity of climate-related harms, we expect to see Yellen move quickly on policies like limiting lending to risky, climate-harming industries and increasing the capital requirements for those loans,” said David Arkush, Director of Public Citizen’s Climate Program.
As the International Panel on Climate Change has made abundantly clear, in order to limit global warming to 1.5ºC, world economies must rapidly phase out oil, gas and coal, and end deforestation. With its influence over government spending, the U.S. financial sector, and U.S. government engagement in development finance, the Treasury Department will play a critical role in shaping the speed and scale of real climate action both in the US and worldwide.
“U.S. banks are among the world’s biggest drivers of climate change, and a central part of our country’s carbon footprint,” said Jason Opeña Disterhoft, senior climate and energy campaigner with Rainforest Action Network. “As the United States rejoins the Paris Agreement, Secretary Yellen must ensure these banks are on a path to zero out their climate impact, ahead of a crucial U.N. climate conference in Glasgow next year.”
“The Climate Movement is ready for a Treasury Secretary who understands how big the climate crisis is and how urgently we need a bold and equitable response. We believe that Yellen is going to do the right thing, namely moving quickly to manage the decline of fossil fuels and deforestation-risk commodities in our economy and within the finance sector. We are confident that in 2021, as far into the climate crisis as we are, Yellen knows we need a lot more than a carbon tax,” said Jenny Marienau Zimmer, 350Action Campaigns Manager.
Included in STMP’s letter to the incoming administration were a set of key questions for the purpose of evaluating a nominee’s commitment to climate action, like “Should oversight and regulation of financial institutions encompass their climate impact: that is, their contributions to climate change and climate risk through their lending, underwriting, investment and other services?”
“We expect the new Treasury Secretary to do everything in her power to ensure the department plays a stronger role in accelerating and expanding action on climate change and confronting our country’s devastating legacy of environmental racism. We need Yellen to prohibit lending for risky industries that are destroying our planet, poisoning Black and Brown, and violating Indigenous sovereignty.” said Erika Thi Patterson, Environmental Deputy Campaign Director at the Action Center on Race and the Economy.
In the coming days, STMP plans to roll out its climate financial regulatory policy priorities for the Biden administration. This includes specific priorities that the new Treasury Secretary must take on to address the systemic risks and impacts of climate change. These center on ensuring that U.S. financial institutions zero out their climate impact, especially by phasing out their fossil and deforestation financing, with mandatory disclosure of climate risk and impact as one initial step.
“The Treasury Department plays a critical role in the scale and speed of climate action,” said Carroll Muffett, President of the Center for International Environmental Law. “Treasury is responsible for shaping the lending policies of the World Bank, investigating money laundering linked to illegal deforestation, addressing the risks of climate change to the financial system, and reducing the climate impacts of the financial sector.”