Federal Reserve Withdraws from NGFS Climate Coalition Days Before Trump's Office, Cites Scope Beyond Mandate

Jan 17, 2025, 08:16 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 focused on integrating climate-related financial risks into monetary and regulatory frameworks. The Fed cited that the NGFS's scope had broadened beyond its statutory mandate as the reason for its exit. The decision comes just days before Donald Trump, who has been critical of government-led climate policies, is set to take office. The NGFS was established in 2017 to help central banks and financial supervisors address climate risks. The Fed joined the group in 2020, but Chair Jerome Powell has maintained that the Fed's role in addressing climate change is limited, emphasizing that such policies should be determined by elected government bodies rather than the central bank. Five of the Fed's governors voted in favor of leaving the NGFS, while Governors Michael Barr and Adriana Kugler abstained.