“U.S. Regulator Homes In On Climate Risks To U.S. Markets”

“SAN FRANCISCO – The first public report on climate-related risks to financial markets ever commissioned by a U.S. market regulator will be out in June, the head of the group charged with writing it said on Wednesday.

The report, by a 35-member panel formed last month by the Commodity Futures Trading Commission, “will address both the short-term financial risks that may be associated with the transition to a low carbon economy, as well as the current and future market and financial risks associated with the physical risks that will arise from a warming climate,” Bob Litterman, a partner at hedge fund Kepos Capital and the panel’s chair, said at a public meeting held at the CFTC’s Washington headquarters.

It will include policy recommendations on oversight, including disclosures and stress testing against climate events, as well as ideas for new products for hedging against climate risk, he said, adding, “Today the incentives around the world go in the wrong direction, and this has to change.” “

Ann Saphir reports for Reuters December 11, 2019.