An environmental group with ties to the White House is pressing the Biden administration to emphasize climate change as it considers nominees to the Federal Reserve.
Driving the news: Evergreen Action, in a new memo shared with Axios, lays out five actions they want from the Fed, including:
- Imposing "limits on the amount of greenhouse gas pollution that banks can finance through their lending and investment portfolios."
- "Stress tests" of banks to determine their readiness for climate-related shocks, something the Fed has not yet fully embraced.
Why it matters: The memo comes as President Biden is deciding whether to renominate Jerome Powell for another term as Fed chairman. Randal Quarles' term as the Fed's vice chair for supervision ends in mid-October.
Thought bubble, via Axios Business Editor Kate Marino:Markets like consistency, and Powell would provide that. Treasury Secretary Janet Yellen has reportedly told the White House she supports a second term for Powell, which would increase his odds of keeping the job.
- But progressive Democrats have pressured President Biden for an appointment that would take a more proactive approach to regulating banks.
What's next: Evergreen intends to share the report with administration officials and Capitol Hill offices to "ensure that the Fed’s responsibility to confront climate risk is prioritized throughout the nomination and confirmation process, as well as once the Chair gets to work," the group said.
The intrigue: Evergreen is a young-ish group (they formed in 2020) but they're well connected.
- Maggie Thomas, Evergreen's co-founder and former political director, is now chief of staff for White House domestic climate boss Gina McCarthy.
- The group's staff and advisory board is composed of veteran Democratic political operatives and activists that work with an array of progressive groups.
The big picture: Evergreen's effort is just the latest sign that green groups are keen to see financial regulators and overseers make climate risks and clean energy finance a priority — domestically and abroad.
- A new report from Oil Change International and other groups says central banks could play a key role in moving financial flows away from fossil fuels, but have instead "tinkered at the edges."
