In a recent move, Democratic lawmakers have intensified their call for robust action from U.S. financial regulators concerning the escalating risks posed by climate change. Led by Sen. Elizabeth Warren and Rep. Sean Casten, twenty legislators addressed leaders of key regulatory bodies including the Federal Reserve and the Office of the Comptroller of the Currency (OCC).

The lawmakers expressed concern over the United States lagging behind global peers in establishing effective measures to tackle financial vulnerabilities linked to climate change. They highlighted a Bloomberg report indicating U.S. regulators’ role in thwarting efforts to elevate climate risks in international financial regulations.

“The United States’ lack of progress and innovation in establishing robust measures to address the financial and economic risks from climate change places us behind our international peers and is counterproductive to American interests,” the lawmakers emphasized in their joint letter.

The letter underscores two primary concerns: the physical risks stemming from more frequent and severe extreme weather events, and the “transition risk” associated with shifts in economic dynamics resulting from efforts to reduce carbon emissions and dependency on fossil fuels.

However, the issue has sparked intense debate, particularly as Republicans argue against what they perceive as biased support for environmentally conscious investments. Critics contend that integrating climate considerations into financial policy could unfairly favor greener industries.

In response to queries, the FDIC chose not to comment, while a Federal Reserve spokesperson indicated they would respond in due course. The OCC did not immediately provide a comment.

This latest push by Democratic lawmakers reflects a growing urgency among policymakers to address climate change within the framework of financial regulation, despite partisan divides over the economic implications of such measures.