Federal Reserve Exits NGFS Climate Coalition Citing Statutory Mandate, Days Before Trump's Inauguration

Jan 17, 2025, 07:30 PM

The Federal Reserve announced on Friday its withdrawal from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), a global coalition of central banks and regulators focused on addressing climate risk in the financial system. The Fed stated that the NGFS's scope has broadened beyond its statutory mandate, leading to the decision to leave the group. Five of the Fed's governors voted in favor of leaving, while Michael Barr and Adriana Kugler abstained. The central bank had joined the NGFS in 2020, after the group was launched in 2017. This move comes three days before President-elect Donald Trump's inauguration, who has previously criticized government efforts on climate change policies. The NGFS aims to help central banks integrate climate change risks into their monetary policy and financial system oversight. Despite some preliminary steps to incorporate climate change into its operations, Fed Chair Jerome Powell has maintained that the Fed's role in climate policy is limited, emphasizing that such policies should be set by Congress.