By Laura Canevari and Robin Hamaker-Taylor
The US Commodity Futures Trading Commission (CFTC) Commissioner announced the members of the newly established Climate-Related Market Risk Sub-committee (aka the ‘Climate Sub-committee’) on 14 November 2019. The CFTC announced earlier this year that it will begin to assess climate-related financial risks, in line with actions announced by its counterparts around the world in recent years. Establishing this sub-committee signals ongoing commitment to this goal.
The Climate Sub-committee is sub-committee of the CFTC’s Market Risk Advisory Committee (MRAC), and it will have 35 members representing a range of expertise and industries. Representation will be from financial markets, insurance and banking sectors, data and intelligence providers, as well as academics with a range of knowledge on climate change, public policy and finance. among others.
The sub-committee will provide a report to the MRAC detailing climate related financial and market risks and will proactively identify and assess the financial market impacts of climate change. A preliminary set of topics and issues the sub-committee will cover, to that end, were also released. Specifically, the sub-committee will aim to carry out the following activities, among others:
- Identify challenges or impediments to evaluating and managing climate-related financial and market risks;
- Identify how market participants can improve integration of climate related scenario analysis, stress testing, governance initiatives, and disclosures into financial and market risk assessments and reporting;
- Identify policy initiatives and best practices for risk management and disclosure of financial and market risks related to climate change that support financial stability; and
- Identify appropriate methods by which market participants’ data and analyses can enhance and contribute to the assessment of climate-related financial and market risks and their potential impacts on agricultural production, energy, food, insurance, real estate, and other financial stability indicators.”
The full list of the new committee members can be viewed via the CFTC website, by clicking here.