Investing.com -- The U.S. Federal Reserve revealed on Friday that it has withdrawn its membership from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), a global body of central banks and regulators focused on managing climate risk in the financial system. The Fed cited the expanded scope of the NGFS, which it felt exceeded its statutory mandate, as the reason for its exit.
The Fed initially joined the NGFS in 2020. The decision to leave the group arrives just three days prior to President-elect Donald Trump’s inauguration, who has previously expressed criticism towards government-led climate change initiatives.
Established in 2017, the NGFS’s primary role is to assist central banks and bank supervisors in incorporating climate change risks into their monetary policy and financial system oversight work. A spokesperson for the NGFS has yet to respond to a request for comment on the Fed’s departure.
In the past few years, the Fed has attempted to integrate climate change considerations into its work through initial analyses and reports. However, Chair Jerome Powell has consistently stated that the Fed’s role in this area is limited. Powell asserts that the Fed is not tasked with establishing climate change policy, a responsibility he believes rests with Congress.
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