By Andrea Shalal and Jeff Mason
WASHINGTON (Reuters) -President Joe Biden on Thursday directed federal agencies to assess and mitigate the increasing and serious risks that climate change poses to individuals, businesses, the federal government and the U.S. financial system, the White House said.
Biden issued an executive order requiring development of a comprehensive government-wide climate-risk strategy within 120 days, as well as an annual assessment of climate-related fiscal risks as part of the U.S. budget.
It aims to harness the purchasing power of the federal government, which spends more than $550 billion a year on products and services, by requiring major suppliers to be more transparent about their greenhouse gas emissions and climate-related risks, officials said.
“This cannot be optional. The stakes are simply too high. The federal government has to lead by example,” White House climate adviser Gina McCarthy told reporters. “And we need to require the same level of responsibility from those we do business with.”
Brian Deese, director of the National Economic Council, said the order marked a sea change in the U.S. approach to climate risks from that of the former Trump administration, which acted to curb sustainable and equitable investing by U.S. pension funds.
The order directs Labor Secretary Marty Walsh to consider revising, suspending or rescinding Trump-era rules that forced pension fund managers to put retirees’ financial interests ahead of climate change and other issues when allocating investments.
The order, initially expected last month during Biden’s climate summit with other global leaders, also encourages the independent Financial Stability Oversight Council, headed by Treasury Secretary Janet Yellen, to assess climate risks to the stability of the federal government and the financial system.
Yellen told reporters she would make the issue a top priority.
“Our pensions, our savings, our future livelihoods depend on the financial sector to build a more sustainable and resilient economy,” she said. “We all need to have the best tools and the best data to make well-informed decisions. This executive order puts us on the path to get there.”
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