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The Federal Reserve announced on Friday that it was withdrawing from the global climate change regulatory body because of its activities that exceed the scope of the Fed’s statutory authority.
The Fed withdrew from the Network of Central Banks and Supervisors on the Greening of the Financial System (NGFS), which was created in 2017 to facilitate the advancement of green finance and climate policy. The group develops policy recommendations for central banks and financial regulators to play a role in combating climate change by including climate risks in their monitoring work.
In 2020, the Federal Reserve joined the NGFS as a permanent member, and the organization has more than 100 central banks and financial regulators as members.
“While the Committee appreciated the engagement with the NGFS and its members, the work of the NGFS has increasingly expanded, covering a wider range of issues that are outside the Committee’s statutory mandate,” the Committee said in a statement.
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The Federal Reserve announced its departure from the Network of Central Banks and Supervisors for Greening the Financial System, citing the group’s expanding regulatory focus. (iStock / iStock)
In recent years, the Fed has taken some steps to integrate climate change into its work through the use of preliminary analyzes and reports.
However, Fed President Jerome Powell has repeatedly insisted that the Fed is not responsible for setting climate change policy and that those issues are a matter for Congress.
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Federal Reserve Chairman Jerome Powell said Congress, not the Fed, is responsible for climate rules. (Alex Wong/Getty Images/Getty Images)
The Fed’s announcement comes ahead of the inauguration President-elect Trump for his second term in the White House, which is set to begin on Monday.
Trump has criticized the government’s efforts to implement climate change policy.
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Reuters contributed to this report.
