Federal Reserve Disbands Climate-Focused Internal Groups

It has been reported that the Federal Reserve has disbanded certain internal groups that were intended to develop “institutional capacity and knowledge” with respect to climate risk.  Specifically, among the groups that have been disbanded are the Supervision Climate Committee, the Financial Stability Climate Committee, the Climate Committee on Economic Activity and the Climate Data Committee.  These groups were all disbanded in March 2025. 

This development further emphasizes the degree to which the federal government under the Trump Administration has sought to undo the efforts of the Biden Administration to incorporate into government policy the assessment of climate risk and addressing the challenges of climate change.  In particular, there have been a number of these efforts in the financial sector, whether abandoning the SEC's mandatory climate disclosure rule or deciding to rescind a Department of Labor rule enabling ESG-focused investing by 401(k) plans. 

While a certain degree of regulatory reversal is expected with a change of administrations, the degree to which the institutional capacity of the federal government to engage with climate risk has been deliberately degraded is noteworthy.  The disbandment of internal organizations, and the abandonment of key policies (with accompanying enforcement and support staff) will render it considerably more difficult to resurrect similar climate-focused policies in a subsequent administration, due to a lack of appropriate personnel and institutional knowledge.  Indeed, this may be an intended consequence of such a re-shaping of government structures.