Blog: Sen. Markey and Reps. Pressley, Tlaib Introduce Legislation to … – Ed Markey

Bill
Text (PDF)
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(PDF)

Washington (March 30, 2023) – Senator Edward J. Markey (D-Mass.)
and Representatives Ayanna Pressley (MA-07) and Rashida Tlaib (MI-12) today
reintroduced the Fossil Free Finance Act, legislation that would
direct the Federal Reserve to require major banks and other Systemically
Important Financial Institutions (SIFIs) to stop financing projects and
activities linked to increased greenhouse gas emissions and submit a plan on
how they will meet these requirements. Specifically, the Fossil Free
Finance Act 
would require that all banks holding more than $50 billion
in assets and all nonbank SIFIs reduce financed emissions by 50 percent by 2030
and cease financing emissions by 2050. The legislation would require banks to
align financing with science-based emission targets, prioritize withdrawing
funding from companies and projects that have a disproportionate negative
impact on low-income and minority communities, and prioritize lending to
companies that provide benefits to workers impacted by the transition to a
clean energy economy. In addition, the Fossil Free Finance Act would
require the Federal Reserve to report to Congress on commitments made by banks
and nonbank SIFIs to reduce financed emissions and make progress on their targets.

 

“Climate risk is financial risk—posing a grave threat to our
global economy, including our financial systems. The Federal Reserve has a
responsibility to protect financial stability, but instability will run rampant
if climate chaos grows unabated,” said Senator Markey. “I am
proud to reintroduce the Fossil Free Finance Act, legislation to
require our financial institutions, including banks, to protect Americans’
savings, investments, and economy by taking into account not only the planetary
but the economic threats posed by climate change.”

“When our federal government allows our nation’s largest banks to bankroll the
dirtiest fossil fuel projects, our planet, our people, and our economy suffer,” said
Representative Pressley. 
“We need a financial system that recognizes
the existential threat posed by climate change and takes aggressive action to
stop it. Our Fossil Free Finance Act would do just that by
requiring banks to stop financing dirty fossil fuel projects and help us
prevent a massive, climate-induced economic collapse. We must leverage every
tool at our disposal to save our economy, save our planet, and save lives
before it’s too late.”

“My residents deserve to breathe clean air,” said Representative
Tlaib. 
“Our neighborhoods are surrounded by polluters poisoning our
air, leaving one elementary school with the worst air monitoring results than
any other in the state. Financial institutions under the Federal Reserve’s
supervision provided trillions in direct fossil fuel financing—and each new
project makes our health disparities worse. The Federal Reserve’s role is not
to surrender our planet to corporate polluters and shepherd our financial
system to its destruction. The Federal Reserve’s role is to act. I am proud to
join Senator Markey and Representative Pressley in introducing the Fossil
Free Finance Act 
to require the Federal Reserve to finally address the
risks climate change poses—and act at the scale this crisis demands.”

A copy of the Fossil Free Finance Act can be found HERE.
A copy of the one-pager can be found HERE.

The Fossil Free Finance Act would require financial
institutions to submit and implement a plan to:

  1. Reduce financed emissions by 50 percent by 2030;
  2. Reduce financed emissions by 100 percent by 2050;
  3. Discontinue financing new or expanded fossil fuel
    projects 60 days after enactment of the bill;
  4. Discontinue coal financing by 2025;
  5. Discontinue financing fossil fuel projects by 2030; and
  6. Stop financing commodities with a known deforestation
    risk.

Cosponsors in the Senate include Senators Jeff Merkley
(D-Ore.) and Bernie Sanders (I-Vt.). 

The Fossil Free Finance Act is endorsed by Public Citizen,
Evergreen Action, Americans for Financial Reform, Zero Hour, 350.org and
Positive Money US, Greenpeace USA, Hip Hop Caucus, Friends of the Earth,
Rainforest Action Network, Global Witness, Stand.earth, Green American, 350
Conejo/San Fernando Valley, 350.org, 350Hawaii, 350Hawaii, 350NJ-Rockland, Bold
Alliance, California Reinvestment Coalition, Climate Families NYC, Climate
Hawks Vote, Climate Organizing Hub, Coast Range Association, Coastside Jewish
Community, Dayenu: A Jewish Call to Climate Action, Divest NJ, Elders Climate
Action, Extinction Rebellion San Francisco Bay Area, Fossil Free California,
Fridays For Future Digital, Giniw Collective, International Student
Environmental Coalition, Lakota People’s Law Project, MARBE SA, Mazaska Talks,
Mid-Ohio Valley Climate Action, MN350 , New Mexico Climate Justice, New York
Communities for Change, Oil and Gas Action Network, One Earth Sangha, Rise and
Resist Environmental Group, Rivers & Mountains GreenFaith, Rivers & Mountains
GreenFaith Circl, Seeding Sovereignty, Texas Campaign for the Environment, The
Romero Institute, The YEARS Project, Third Act, Third Act Virginia, Youth
Emergency Auxiliary Service Sierra Leone, and Zero Hour.

“The Fossil Free Finance Act is the remedy for the Federal
Reserve’s slow and timid approach to protecting the financial system. Even
after the Fed has recognized climate change and the energy transition pose a
systemic risk to the financial system, it is still moving far too slowly. As
the failure at Silicon Valley Bank and its peers show, the financial system
cannot afford for the Fed to wait until things break. This bill will require
the Fed to proactively manage the risks banks face, winding down their exposure
to volatile high emissions assets in line with global, science-based targets.
By putting the financial system on this safer path, the Fossil Free
Finance Act
 will also help build resilience for the unforeseeable
climate risks to come,” said Robert Weissman, President at Public
Citizen.

“Wall Street banks have failed to live up to their own climate commitments by
providing billions of dollars to new fossil fuel projects. Without strong
federal oversight and regulation, these banks will only continue pouring money
into the fossil fuel expansion driving the climate crisis, taking on excessive
risk and threatening to destabilize the entire economy. So far, financial
regulators have failed to rein in Wall Street’s reckless behavior. We applaud
Senator Markey and Representative Pressley for their leadership in protecting
our financial system from a climate-driven financial crash,” said Ben
Jealous, Executive Director of the Sierra Club.

“Big Banks have long been propping up polluters over people. Bailouts to banks
and the fossil fuel industry persist while everyday people in frontline
communities are left holding the bag. The Fossil Free Finance Act is
an important step toward eradicating the disproportionate impacts of climate
change on Black, Brown and Indigenous communities. Cutting off the flow of
money toward destructive, extractive industries would help stop projects like
Willow and Keystone XL before they ever get off the ground, lifting organized
people over organized money,” said Tanya Clay House, Executive Vice
President of the Hip Hop Caucus.  

“Despite numerous warnings about the risks climate change poses to consumer
finances and the economy, too many Wall Street banks have only been adding fuel
to the fire. The longer banks continue to finance dirty fossil fuel projects,
the more lives, homes and communities will be lost to or damaged by extreme
weather. The Fossil Free Finance Act is just what we need to
make large banks finally take climate-related financial risks seriously. This
act would help us get and stay on the course that science indicates is
necessary to stave off climate disaster for current and future
generations,” said Mike Litt, Consumer Campaign Director at U.S. PIRG.

“Wall Street banks have time again shied away from their climate commitments,
proving they have no intention to stop financing harmful and risky fossil fuel
projects. These banks are hurtling our economy towards a climate-fuelled crash
and unless regulators step up to rein in their reckless behavior, the most
vulnerable communities will be left to foot the bill. The Federal Reserve has
been dragging its feet on climate for too long. The longer we wait, the greater
the risk. The Fossil Free Finance Act might be exactly what we
need to get the Fed up to speed, to protect our economy and our communities from
Wall Street’s exploits,” said Akiksha Chatterji, Lead Campaigner at
Positive Money US.  

In February, after World Bank President David Malpass announced he would step
down early from his position, Senator Markey led his
colleagues in a letter to Malpass and the World Bank’s Board of Directors,
calling on the Bank to strengthen its commitment to supporting comprehensive
climate action while financing efforts that reduce and prevent the catastrophic
impacts of climate change. Last December, Senator Markey led a
letter to President Biden urging the administration to fulfill its commitment
in the Glasgow Statement to end public financing of international fossil fuel
projects. In August, as chair of the Senate Climate Change Task Force, he led a
public discussion with leading climate finance experts on the importance of
climate-related risk disclosures that protect investors and promote stable
markets. In July 2022, Senator Markey led his
colleagues in a letter to Chair of the Securities and Exchange Commission (SEC)
Gary Gensler urging the Commission to require all public companies to disclose
their climate-related risks and impacts on environmental justice communities.

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