The Biden administration faces a daunting task of rebuilding international alliances that have frayed in recent years. Once it begins, expect to see renewed global cooperation on climate happen quickly, both in prominent settings like the Paris Agreement and in quieter diplomatic efforts, said Rajiv Shah, the president of the Rockefeller Foundation and former head of the U.S. Agency for International Development.
These diplomatic actions, “coupled with the leadership of big companies and big financial institutions,” would be “a tremendous win,” he said.
Business & Economy
Speaking of the private sector, the financial industry could help redirect government policy, said Citi’s Ariel Meyerstein. “There’s a whole other infrastructure, speaking from the financial sector, that we’ve been kind of checked out of for a couple of years,” he said. The government could help set standards for investors that follow environmental, society and governance, or E.S.G., targets, he added. When it comes to corporate climate risk disclosures, this would have a greater impact, he said:
“As we know, in the E.S.G. and sustainability reporting space there are a dizzying array of standards. We could use some alignment there. There are a lot of things you can call Track II diplomacy or just regulatory engagement that happens in normal times, in very robust ways, that doesn’t require legislative or administration action or any executive orders or pronouncements. It’s just doing the work of coordinating with our peers across the world. I think all of that is pretty essential.”
Mandatory disclosures of climate risks by listed companies appears to be a “high priority” for the Biden administration, said Rostin Behnam, a commissioner at the Commodity Futures Trading Commission. “That is probably the first thing people think about when they think about climate change and financial markets.” A new report by the C.F.T.C. starkly outlined the risk of climate change to financial stability, and he explained how the next administration might make use of its findings:
“One of the strongest statements that comes at the very beginning of the report and is often cited — and it’s something that can be embraced or used as a starting point on Day 1 in a new administration — is that climate change poses a major risk to the stability of the U.S. financial system. And I think that in itself will change the posture of how financial regulators are thinking about climate change.”