The Futures Industry Association (FIA) responded last week to a request for information (RFI) from the US Commodity Futures Trading Commission (CFTC), which sought public comment on climate-related financial risk.
In their comments, FIA officials focused on the core risk management issues related to the listed derivatives markets. Specifically, FIA officials also discussed matters related to data, scenario analysis and stress testing, risk management, product innovation, voluntary carbon markets, digital assets, public-private partnerships, and capacity and coordination.
Overall, FIA supports the goal of the RFI, and other action taken by the commission, to promote public dialogue toward better understanding climate-related financial risk related to derivatives markets and underlying commodities markets.
FIA officials pointed out that derivatives markets have positively influenced sustainable finance strategies around the globe through their support of new products and trading venues. The letter also highlights the innovation that has come from FIA’s members, as well as their engagement in projects like the Taskforce on Scaling Voluntary Carbon Markets, among others.
If the CFTC was to take specific action, FIA encourages it to closely coordinate with other financial regulators, both in the U.S. and internationally. This would foster market clarity and not harm private sector-led efforts that seek to help the transition to a lower carbon economy.