The Federal Reserve on Friday announced that it has withdrawn from a global climate change regulation group due to its activities exceeding the scope of the Fed’s legal authority.
The Fed exited the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), which was created in 2017 to help facilitate the advancement of green finance and climate policy. The group develops policy recommendations for central banks and financial regulators to take a role in the fight against climate change by incorporating climate risks into their oversight work.
In 2020, the Federal Reserve joined the NGFS as a permanent member, and the organization had more than 100 central banks and financial regulators as members.
“While the Board has appreciated the engagement with the NGFS and its members, 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,” the Board said in a statement.
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In recent years, the Fed has taken some steps to integrate climate change into its work through the use of preliminary analysis and reports.
However, Fed Chair Jerome Powell has repeatedly insisted that the Fed isn’t responsible for setting climate change policy and that those issues fall under Congress’ authority.
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The Fed’s announcement comes ahead of the inauguration of President-elect Trump for his second term in the White House, which is set to begin Monday.
Trump has criticized governmental efforts to pursue climate change policies.
Reuters contributed to this report.
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