New York Department of Financial Services superintendent Linda Lacewell announced that the authority has become the first US state banking regulator to join the Network for Greening the Financial System (NGFS), an international coalition of nearly fifty bank supervisors dedicated to mobilizing the financial industry to address climate change. In addition, DFS also joined the Sustainable Insurance Forum (SIF), an international network of insurance supervisors seeking to find collaborative ways to help the global insurance industry meet the challenges posed by climate change.
“As the federal government continues to deny climate change and rolls back important regulations designed to sustain our planet for future generations, New York is once again leading the way to contribute solutions to a real and growing problem,” she said in a statement. “Both the global banking and insurance industries have a critical role to play in addressing climate change, and as a member of NGFS and SIF, DFS will be collaborating with our international partners as well as working closely with our regulated entities to build for a sustainable future.”
Extreme weather events such as Hurricane Dorian, record-breaking wildfires in California, record-high temperatures in Europe, and recent flooding in upstate New York are becoming more common. As the frequency increases, so too, do damages and the cost of recovery. According to a recent report, the cost of extreme weather in the US is likely to result in damages totaling about $750 billion for this decade alone. Studies have also shown that climate change poses trillions of dollars worth of risk to the U.S. financial system.
NGFS is a group of nearly 50 central banks, supervisors, and international organizations that exchange experiences, share best practices, contribute to the development of environment and climate risk management in the financial sector, and to mobilize mainstream finance to support the transition toward a sustainable economy. Its purpose is to define and promote best practices to be implemented within and outside of the membership of the NGFS and to conduct or commission analytical work on green finance.
SIF is a network of nearly 25 leading insurance supervisors and regulators seeking to strengthen their understanding of and responses to sustainability issues for the business of insurance. SIF conducts surveys, issues reports on best practices, recommends, and provides input to the International Association of Insurance Supervisors on issues relating to sustainability, including climate change risks, and also provides advice to the World Bank Group and other international organizations.