WASHINGTON, D.C.— Dennis M. Kelleher, Co-founder, President and CEO of Better Markets, released the following statement in connection with Better Markets’ comment letter filed with the Commodities Futures Trading Commission (“CFTC”) in response to the agency’s request for information on climate-related financial risk (“Climate RFI”).

“The CFTC must act now and use its broad authority to address the financial threats from climate change, including those that impact the kitchen tables of all Americans.  For example, the availability and price of cereal for breakfast, bread for lunch sandwiches, gas for the car to get to work, day care, or doctors, and so many other everyday necessities depend on commodity markets that the CFTC is mandated to regulate.  Those markets, and the price and availability of the commodities that are essential in the lives of every American literally every day, are going to be seriously impacted by climate change.  The CFTC has to address that threat now, not when the risks materialize.  And that work must begin by addressing the CFTC’s loophole-ridden position limits rule that fails to protect Americans from speculators running amuck in the commodities markets.

“The CFTC must also ensure that risk management frameworks and reporting obligations take climate risks into account, both physical and transition, as we detail in our comment letter.  After all, a prerequisite to properly managing risk is having a full understanding of where risks are accumulating in the financial system, and enhanced risk management tools like climate-based scenario analysis can help prepare markets for changes in the climate in coming years.

“The CFTC also has to address concerns surrounding abuses in the markets for voluntary carbon credits and their derivatives.  Concerns are growing about the integrity of these credits and whether they actually reduce or offset emissions, or whether they’re largely corporate window-dressing.  To help combat climate change and provide a clear picture to investors, the CFTC must help expose and stop greenwashing wherever it is found.”

“While we commend the CFTC for seeking wide-ranging public input in the Climate RFI on steps it can take to help address these challenges, action is what the American people want and deserve.  The reality of climate change is certain, but progress towards combatting the effects is woefully insufficient and regulators like the CFTC need to start taking meaningful, concrete action to address climate risks.”

You can find our full public comment letter here.