Newly proposed legislation on Capitol Hill would nullify certain interagency guidance pertaining to climate-related financial risk management for large financial institutions.
U.S. Rep. Troy Balderson (R-OH) on Nov. 14 sponsored the currently unnamed H.R. 10120, alongside two Republican cosponsors: U.S. Reps. August Pfluger of Texas and Kevin Hern of Oklahoma.
Specifically, H.R. 10120 would invalidate final interagency guidance from the Federal Reserve, Comptroller of the Currency, and the Federal Deposit Insurance Corporation (FDIC) titled, “Principles for Climate-Related Financial Risk Management for Large Financial Institutions,” published Oct. 24, 2023.
The guidance encourages banks and other financial institutions to manage “climate-related financial risks” associated with their investments and loans.
Balderson says that the guidance could serve to restrict funding and resources for American energy industries because its vague language may pressure financial institutions to support environmental, social, and governance (ESG) policies over sound financial decisions.
“This guidance is nothing more than a back-door effort by the Biden-Harris administration and financial regulators to push their radical ESG agenda,” Balderson said. “Under this framework, federal regulators could pressure banks into avoiding industries crucial to Ohio, including oil and gas, by penalizing companies that don’t follow the administration’s climate priorities.
“This puts the wokeness ahead of sound investment strategies, costing everyday Americans,” he added.
If enacted, H.R. 10120 would render the guidance null and void and prevent the Federal Reserve, Comptroller of the Currency, and the FDIC from issuing any substantially similar guidance in the future, according to the congressman.