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Climate Change Threatens Financial Crisis Worse Than '08: Report

Climate change could spark a financial crisis even worse than that of 2008, warns a report from Sierra Club and Center for American Progress.
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Climate change could lead to a financial crisis even worse than 2008, warns a report from the Sierra Club and Center for American Progress.

The financial sector is a large part of the global-warming problem, the groups said.

“If we are going to avert the worst impacts of climate change and if we are to avoid another financial crisis potentially far more dire than that of 2008, it is critical that we address emissions from the industry that is both fueling the climate crisis and threatening economic stability: the US financial sector,” the study stated.

“Our results found that just portions of the portfolios of the eight banks and 10 asset managers studied in this report financed an estimated total of 1.968 billion tonnes carbon-dioxide-equivalent based on year-end disclosures from 2020.”

If those companies were a country, they would have the fifth largest emissions in the world, standing between Russia and Indonesia, the report said.

The banks it studied include Bank of America  (BAC) - Get Free Report, Citigroup  (C) - Get Free Report, Goldman Sachs  (GS) - Get Free Report JPMorgan Chase  (JPM) - Get Free Report and Wells Fargo undefined.

The asset managers include BlackRock  (BLK) - Get Free Report, Capital Group, Vanguard Group and Pimco.

There is “broad recognition from financial institutions and policy makers that climate change poses significant threats to financial stability,” the report said.

So, “it is not only within the mandate of the Biden administration and financial regulators to address climate change, but necessary to fulfil their mission of maintaining the stability of individual financial institutions and the entire financial system.”