Sustainable Finance Lobbying Overview: The Financial Services Forum has taken a mixed but overall more negative position on sustainable finance policies, primarily engaging on climate risk and disclosure proposals in the US.
Top-Line Messaging on Sustainable Finance Policy: The Financial Services Forum states that it recognizes the risks of climate change, and appears to support the transition to a low-carbon economy, although the level of ambition it supports for this transition is unclear. In February 2021, the Forum signed onto the US Climate Finance Working Group joint paper on Financing a U.S. Transition to a Sustainable Low-Carbon Economy, which states support for the role of the financial sector in delivering the goals of the Paris Agreement. The same joint paper states support for some climate-related financial policies while cautioning against others, emphasizing the importance of real economy policies and market-based solutions to addressing climate risk.
Position on Regulated Corporate ESG Disclosure: In comments to the Securities and Exchange Commission in June 2022, the Financial Services Forum outlined several objections to the Commission’s proposed climate disclosure rule. The Forum requested that financial statement metrics disclosures be removed and called mandatory Scope 3 emissions disclosure “premature,” warning about the adverse effects the proposal could have on capital markets, lending activity, and corporate emissions reduction target-setting. The Forum met with the SEC in September 2022 to further discuss concerns about “burden and cost” of the proposed rule, but a detailed account of this meeting is unavailable.
Position on Incorporating ESG Factors into Risk Management/Prudential Regulation: The Financial Services Forum has taken a cautious approach to policies to incorporate ESG factors into risk management. In October 2021, the Forum issued a statement from CEO Kevin Fromer welcoming the Financial Stability Oversight Council’s report on climate-related financial risk but stressing the need for flexibility in regulation. Blog posts from October 2021 and February 2022 take a more negative approach, stating support for incorporating climate risk into scenario analyses but not stress testing, and encouraging regulators to take a flexible and phased approach when developing principles for managing climate-related risks. The Forum’s comments to regulators have also been more negative. In comments to the Office of the Comptroller of the Currency in February 2022, the Forum supported the OCC’s efforts to develop climate-related financial risk management guidance but advocated for flexibility and phase-in of scenario analyses. In comments to the Federal Deposit Insurance Corporation in June 2022 the Forum opposed a requirement to consider the impacts of risk management on broader aspects of the economy, and in comments to the Basel Committee on Banking Supervision in February 2022 the Forum advocated for increased flexibility in risk management and a less prescriptive role for the board in overseeing this risk management.
Transparency: The Forum has disclosed some policy positions and efforts to influence sustainable finance policies, including posting letters to policymakers on its website. The Forum is transparent about its membership, including which companies hold positions in the executive.