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President Joe Biden speaks during climate change virtual summit from the East Room of the White House campus April 22, 2021. (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)

President Biden issued an executive order Thursday that directs agencies government-wide to launch or expand efforts to analyze and lessen economic risks stemming from climate change.

Why it matters: The order lays the groundwork for new oversight and mandates that would affect banking and other sectors. It signals growing concerns that the government lacks sophisticated understanding of how global warming creates new or growing jeopardy for financial and government institutions and consumers.

  • "Our modern financial system was built on the assumption that the climate was stable," said National Economic Council director Brian Deese. "And today it's clear that we no longer live in such a world."

Driving the news: Major components of the order, per a White House summary, include...

  • Ordering a strategy within 120 days to "identify and disclose climate-related financial risk to government programs, assets, and liabilities." It would identify "public and private financing" needed to reach net-zero U.S. emissions by 2050.
  • It calls on the Treasury secretary, as head of the multi-agency Financial Stability Oversight Council, to specifically analyze risks to financial system stability. That effort would bring ideas within 180 days to reduce risks, including agency steps to improve risk disclosures and stitch climate-related financial risks into regulation and supervision.
  • Tasking the Labor Department with exploring how to protect pensions and assess how the Federal Retirement Thrift Investment Board weighs climate risk.
  • Efforts to weave climate risk consideration into federal lending and procurement. They include potential new requirements on federal suppliers to disclose emissions and financial risks, and ensure that agency procurement practices reduce them.

Catch up fast: The order, to some degree, reinforces several efforts already underway.

  • The Treasury Department has already created a climate change "hub" and appointed a leader who reports directly to Secretary Janet Yellen.
  • Another example: The Securities and Exchange Commission is moving closer to beginning to write new disclosure rules for public companies.

Quick take: The rollout underscores high-level focus on the topic, with a who's who of top officials including Deese, Yellen and national climate adviser Gina McCarthy all briefing reporters.

  • McCarthy made clear that some form of mandatory risk disclosure is in the works.
  • "This cannot be voluntary. This cannot be optional," McCarthy said.
  • "The stakes are simply too high. The federal government has to lead by example in its own operations, and we need to require the same level of responsibility from those we do business with," she added.

The big picture: Climate-related financial risk is a very broad term that encompasses several types of jeopardy.

  • It ranges from economic losses from extreme weather and climate events to ways that emissions regulations and transition to lower carbon energy affect banks' portfolios and the viability of polluting industries.
  • The White House summary notes that extreme weather "disrupt entire supply chains and deprive communities of food, water, or emergency supplies," and also cites risks to power grids and risks to homes and businesses from sea-level rise.

What they're saying: The Stop The Money Pipeline coalition called the order a "important step for the climate finance movement" and called for completion of the various reports and plans in the order to be complete before the pivotal UN climate summit in November.

  • The coalition is an umbrella group of activists pushing for financial institutions to end financing for fossil fuel projects.

Go deeper: Prominent investors jump into the climate risk space

Go deeper

Ben Geman, author of Generate
Aug 26, 2021 - Politics & Policy

Schumer's high-stakes climate play

Photo Illustration: Shoshana Gordon/Axios. Photo: Samuel Corum/Bloomberg via Getty Images

It's just over two months until a pivotal United Nations climate summit, and if Capitol Hill's importance to the equation wasn't already clear, it sure is now.

Catch up fast: Senate Majority Leader Chuck Schumer released an analysis showing the Democrats-only reconciliation plan — and to a much lesser degree the bipartisan infrastructure deal — would essentially put the U.S. on track to meet President Biden's pledge under the Paris Agreement.

The government-industry cyberdefense dance

Illustration: Shoshana Gordon/Axios

After assembling a team of tough-minded regulators to take on big technology companies, the Biden administration on Wednesday called on many of those same companies to work with the federal government to address a growing wave of cyberattacks.

Driving the news: A White House summit between President Biden and tech leaders Wednesday, including the CEOs of Apple, Google, Amazon, Microsoft and IBM, concluded with a raft of announcements of new cybersecurity projects and spending plans.

Updated 1 hour ago - Politics & Policy

Omicron dashboard

Illustration: Shoshana Gordon/Axios

  1. Health: Louisiana officials find "probable" Omicron case in cruise ship COVID outbreak — CDC director says number of U.S. Omicron cases "likely to rise" — Two years of COVID-19.
  2. Vaccines: Data demonstrates most-vaccinated counties less vulnerable to worst of COVID — Omicron adds urgency to vaccinating world — Omicron fuels the case for COVID boosters.
  3. Politics: NYC to impose vaccine mandate on private employers — Nevada to impose insurance surcharge on unvaccinated state workers — New Jersey GOP lawmakers defy statehouse COVID policy.
  4. World: U.S. announces $400M for global COVID vaccine distribution — Vaccine mandates lose steam in the U.S. while Europe doubles downWHO: Delta health measures help fight Omicron.
  5. Variant tracker: Where different strains are spreading.