Trade Bodies Set Out Framework for US Transition to Low-Carbon

The framework sets out ten principles to inform the policymaking process and catalyse the transition to a more sustainable and inclusive low-carbon economy.

The US Climate Finance Working Group has released a set of principles providing a framework for financing the US transition to a more sustainable, more inclusive, low-carbon economy.

The Working Group comprises 11 financial services trade associations, including the ABA (American Bankers Association), FIA (Futures Industry Association), ICMA (International Capital Market Association), IIF (Institute of International Finance), ISDA (International Swaps and Derivatives Association) and SIFMA (Securities Industry and Financial Markets Association).

The published ‘Principles for a US Transition to a Sustainable Low-Carbon Economy’ represent the perspectives of banks, investment banks, insurers, asset managers, investment funds, pension funds and other financial intermediaries – and are intended to provide a policy framework for the transition to a low-carbon economy.

The Principles are:

  • Set science-based climate policy goals that align with the Paris Agreement
  • Increase and strengthen US international engagement
  • Provide clear long-term policy signals that foster innovation in financial services
  • Price carbon and leverage the power of markets
  • Minimise costs and support jobs in the transition
  • Foster international harmonisation of taxonomies, data standards and metrics
  • Promote more robust climate disclosure and international standards
  • Ensure climate-related financial regulation is risk-based
  • Build capacity on climate risk modelling and scenario analysis
  • Strengthen post-disaster recovery, risk mitigation and adaptation

More information on the Principles is available in a paper published by the Working Group, available here.

Through the Principles, the trade associations hope to inform the policymaking process and demonstrate the financial industry’s willingness and capacity to support a pragmatic approach to transitioning to a more sustainable, and inclusive, low-carbon economy.

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