Private Sector Implications of Biden’s Executive Order on Climate-Related Financial Risk

beSpacific 2021-06-11

Harvard Law School Forum on Corporate Governance: “The Biden Executive Order on Climate-Related Financial Risk (the Executive Order) is the latest significant step by the Administration to analyze and mitigate the risks that climate change poses to the U.S. economy, businesses, workers and the financial system. [1] It aims to advance the Biden Administration’s policy of promoting disclosure of climate-related financial risk, mitigating climate-related financial risk, promoting job creation and social and economic justice goals and reaching net-zero emissions by 2050. The Executive Order contains directives to various federal regulators to take actions to address climate-related financial risk in five different broad areas: government-wide strategy; coordination among financial regulators; Department of Labor actions to safeguard worker life savings and pensions; federal lending, underwriting, and procurement; and the federal budget. This memorandum focuses on those areas of the Executive Order that are most likely to create risks and opportunities for the private sector. These are, in our view, the impact on the financial sector, which will indirectly impact other sectors, the impact on environmental, social or governance (ESG) investing and the impact on those who sell goods and services to the federal government via government procurement…”