Federal Reserve exits global climate change regulation group

Published On Jan 17, 2025, 4:45 PM

The Federal Reserve has withdrawn from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), stating that the group's activities have grown beyond its legal authority. This organization, which the Fed joined in 2020, aimed to push forward green finance and climate policy across central banks. The Fed emphasized that it does not have the mandate to establish climate change policy, which falls under Congress's jurisdiction. The announcement is made ahead of President-elect Trump's inauguration, who has been critical of climate policies.

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The Fed's withdrawal from climate-related regulatory groups may signal a shift away from prioritizing climate risk in financial oversight, which could affect investments in green technologies or sustainable practices. Investors in green finance or sustainable investments should consider the potential for decreased government support at the regulatory level.

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