Federal Reserve Exits NGFS Climate Coalition, Citing Scope Beyond Statutory Mandate

Jan 17, 2025, 07:19 PM

The U.S. Federal Reserve has withdrawn from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), a global coalition focused on studying climate risk in the financial sector. The Fed stated that the NGFS's scope has broadened beyond its statutory mandate, leading to the decision to leave the group. The move comes just days before Donald Trump's inauguration, amid political pressure from Republican lawmakers who have criticized the Fed's involvement in climate-related initiatives. Five governors voted in favor of leaving, with Michael Barr and Adriana Kugler dissenting. The NGFS, established in 2017, includes over 100 central banks and regulators from more than 90 countries. The Fed joined the coalition in 2020 but has now decided to step back, reflecting a shift in its approach to climate-related financial risks.