Morgan Stanley, Citi, JPMorgan sign off on CFTC panel climate report

Author: Dan Ennis
Published: September 10, 2020
Source: BankDive


Forcing businesses to pay for their greenhouse gas emissions would be the most efficient way to ensure financial markets reduced climate risk, a Commodity Futures Trading Commission (CFTC) subcommittee wrote in a report Wednesday. The report was approved by representatives of more than two dozen businesses, investors and nonprofits, including Citi, Morgan Stanley and JPMorgan Chase.

“Financial markets today are not pricing climate risk,” wrote Bob Litterman, a former Goldman Sachs executive, who leads the subcommittee. “Until this fundamental flaw is fixed, capital will continue to flow in the wrong direction, rather than toward accelerating the transition to a net-zero emissions economy.”

Neither markets nor regulators can do that on their own, the panel acknowledged, adding that such change would require lawmakers to act.