Democratic Senators Launch Investigation of Major Financial Institutions Based Upon Their Retreat From Climate Policies

Earlier this year, each of the major US banks announced their withdrawal from the Net Zero Banking Alliance.  This move, which was likely undertaken in response to the policy priorities of the Trump Administration, was criticized by a number of climate activists.  

At this point, the actions of these major US banks have now triggered semi-official regulatory attention.  Senior Democratic Senators--Warren (D-MA) and Whitehouse (D-RI)--have sent letters to these banks that reportedly “seek to examine the extent to which banks have allegedly caved in to pressure from Republicans and fossil-fuel interests to abandon their fiduciary duty to manage the financial risks that stem from climate change.”  However, as members of the minority party in the Senate, the practical impact of these letters by the Democratic Senators will likely be limited--they do not have the power to convene hearings or issue subpoenas.  Nonetheless, these actions are significant, as they signal potential regulatory actions and hint at a regulatory agenda should the Democratic Party regain power in the midterms--and also offer a road map for potential investigations or enforcement actions by sympathetic state attorneys-general. 

In other words, the conflict over the degree to which business interests must take into account climate concerns has not concluded, despite the Trump Administration's recent actions and policy pronouncements.