US pushes to weaken global climate task force as Trump era retreat intensifies

US pushes to weaken global climate task force as Trump era retreat intensifies

Top US financial regulators are pressing for the downgrade of a key international task force that addresses climate-related financial risks, in a move that underscores America’s broader withdrawal from environmental initiatives under President Donald Trump, the Financial Times reported.

US regulators seek to downgrade Basel climate body

At an upcoming meeting of the Basel Committee on Banking Supervision — the global standard-setter for financial regulation — US representatives are expected to propose that the committee’s climate-focused task force be reduced in status to a lower-level working group, according to sources briefed on the agenda.

The four US institutions behind the push — the Federal Reserve, the New York Fed, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) — are acting in alignment with Trump’s broader agenda to strip climate concerns from all branches of government and international financial policy.

Set up in 2020, the Basel committee’s climate task force is co-chaired by Kevin Stiroh of the New York Fed and Frank Elderson of the European Central Bank (ECB). It has released multiple reports proposing global frameworks for climate-risk disclosures and guidelines for financial institutions to address threats from global warming.

Resistance from Europe and environmental advocates

The US-led proposal is expected to meet resistance, particularly from European regulators such as the ECB and the Bank of England, both of which have recently intensified oversight of climate-related risks in the banking sector.

Benoît Lallemand, secretary-general of the advocacy group Finance Watch, called the US move “the wrong move at the worst possible time,” warning that it would send “the absurd signal that climate risks are no longer a concern for financial stability.” He argued the decision would erode the credibility of the Basel Committee as a global rulemaker.

Fed distances itself from climate mandate

Federal Reserve Chair Jay Powell, who has faced criticism from both sides of the climate debate, downplayed the Fed’s role in climate policy. “It’s a real danger for us to try to take on a mandate like that,” Powell said, arguing that climate-related issues fall outside the central bank’s core responsibilities.

In January, the Fed exited the Network for Greening the Financial System (NGFS), a global coalition hosted by the Banque de France that promotes climate-focused financial policy. Powell denied the move was politically motivated, although it coincides with a broader effort by the Trump administration to reorient US financial institutions away from climate action.

Kevin Warsh, a likely contender to succeed Powell as Fed chair in 2026, recently criticized the central bank’s past engagement with climate issues and welcomed its recent shift, stating that the Fed had “changed its tune.”

Political shifts reshape US regulatory landscape

Meanwhile, the Fed has faced domestic pushback over its Basel III “endgame” capital rules. US banks threatened litigation over what they considered overly strict capital requirements, leading to a retreat from the original proposals. Michael Barr, who had spearheaded those efforts, has since stepped down as the Fed’s top banking supervisor and been replaced by Michelle Bowman, who is expected to introduce softer guidelines.

As Monday’s Basel meeting approaches, global financial leaders are watching closely to see whether the US push to scale back the climate task force succeeds — a decision that could reshape how the financial system addresses the growing risks of climate change.