US Treasury Secretary Yellen vows to ‘rejoin’ climate fight


April 30, 2021

US Treasury Secretary Janet Yellen has said the US is ready to rejoin the fight against climate change “after sitting on the sidelines for four years”.

Yellen gave her backing to climate change initiatives such as TCFD in a speech to the Institute of International Finance in April. 

Referencing the decision by former president Donald Trump to pull the US out of the Paris Agreement on climate change, the former Federal Reserve chair said Joe Biden had mobilized the entire government to meet net-zero emissions targets. 

President Biden announced on 22 April that the US would work to reduce its net greenhouse gas emissions by 50-52% relative to 2005 levels by 2030.

Yellen said the US Treasury Department aimed to take the “whole-of-government” approach and turn it into one that was “whole-of-economy”, highlighting thenot importance of the financial sector in financing and leading the transition to a net-zero economy, 

The Treasury Secretary said although there was growing investor demand for climate-aligned investments was rapidly increasing, the current financial reporting system was not producing “reliable, consistent and comparable disclosures” to assess climate-related risks and opportunities. 

She said: “Different reporting frameworks reduce the effectiveness of data, making it challenging or impossible for investors to make informed decisions.” 

As such, she highlighted the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) for providing a solid framework for climate disclosures and efforts to promote is a basis for national and regional authorities’ climate-related disclosures. 

TCFD guidelines have been gaining traction as corporates, regulators and governments have sought reporting standards that can help investors access and understand environmental data. The UK has already begun to incorporate TCFD recommendations into reporting for investors such as pension funds.

Yellen said the US Treasury department would work with the SEC to promote effective and consistent approaches to disclosure. The department was also following the progress of the International Financial Reporting Standards Foundation in establishing a Sustainability Standards Board that would focus on developing a climate disclosure standard. 

The US Treasury will also co-chair a newly relaunched G20 Sustainable Finance Working Group of finance ministries and central banks, she said, considering how to improve existing international initiatives and approaches to sustainability disclosures, building on the work of TCFD. 

She said: “This is an effort to counter another potential market friction – the rise of different policies and approaches across the world creates the potential for inconsistencies that lead to market fragmentation, distorting markets or impeding the flow of capital.” 

Last Updated: 30 April 2021