The U.S. Treasury Department withdrew from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) – a coalition of central banks and regulators focused on bolstering the global financial system to withstand climate change.
The move aligns with the Trump administration’s executive order condemning international environmental agreements and initiatives, claiming they “do not reflect our country’s values or our contributions to the pursuit of economic and environmental objectives” and “steer American taxpayer dollars to countries that do not require, or merit, financial assistance in the interests of the American people.”
“Withdrawal from NGFS is one part of implementing President Trump’s executive orders putting America first in international environmental agreements and unleashing American energy,” the Treasury said in a statement. “NGFS was organized to help to meet the goals of the Paris Agreement, from which the United States withdrew. NGFS’s initiatives are inconsistent with this administration’s priorities to grow the U.S. economy and American jobs, and NGFS’s role diverges from the traditional technical and coordinating roles of other international fora. Important parts of NGFS’s scope, including on monetary policy frameworks, go beyond FIO’s (Federal Insurance Office) core duties. FIO will continue to engage with state insurance regulators and other stakeholders to promote U.S. interests in international insurance engagements.”
The Treasury is not the first agency to withdraw from the NGFS. The Federal Reserve did so just days before Donald Trump returned to the White House, stating that “the work of the NGFS has increasingly broadened in scope, covering a wider range of issues that are outside of the Board's statutory mandate.”
Upon joining the coalition in February 2022, under former President Joe Biden, FIO Director Steven Seitz expressed enthusiasm at the opportunity “to contribut[e] to the NGFS’s important work and objectives.”
“Because climate change presents new challenges and opportunities for the U.S. economy, FIO’s work on assessing climate-related financial risks and their effects on the insurance sector is a top priority for the Treasury Department,” Seitz said at the time.
In December of last year, Consumer Federation of America (CFA) Director of Insurance Douglas Heller asked Seitz for an update on his department’s analysis of how climate change may be affecting property insurance, which began in 2021. Seitz responded, saying he did not have “anything definitive to report.”
The Trump administration’s approach to climate policies has raised concerns among environmental scientists and advocacy organizations.
The Environmental Law & Policy Center (ELPC) in Chicago announced its plans to push back against such actions at the federal and state levels.
“We have a strategic plan in place, and we’re gearing up the necessary defense at the federal levels, and rolling up our sleeves to move forward on the offense [with] opportunities in the Midwest states,” ELPC CEO and Executive Director Howard Learner said in a press release.