New York Department of Financial Services joins SIF and NGFS
Financial Services Superintendent Linda A. Lacewell today announced that the Department of Financial Services has become the first U.S. state banking regulator to join the Network for Greening the Financial System (NGFS), a leading international coalition of nearly fifty bank supervisors dedicated to mobilizing the financial industry to address climate change. In addition, DFS today will also join the Sustainable Insurance Forum (SIF), an international network of insurance supervisors seeking to find collaborative ways to help the global insurance industry meet the challenges posed by climate change.
“As the federal government continues to deny climate change and rolls back important regulations designed to sustain our planet for future generations, New York is once again leading the way to contribute solutions to a real and growing problem,” said Superintendent Lacewell. “Both the global banking and insurance industries have a critical role to play in addressing climate change, and as a member of NGFS and SIF, DFS will be collaborating with our international partners as well as working closely with our regulated entities to build for a sustainable future.”
Extreme weather events such as Hurricane Dorian, record-breaking wildfires in California, record-high temperatures in Europe, and recent flooding in upstate New York are becoming more common. As the frequency increases, so too, do damages and the cost of recovery. According to a recent report, the cost of extreme weather in the U.S. is likely to result in damages totaling about $750 billion for this decade alone. Studies have also shown that climate change poses trillions of dollars worth of risk to the U.S. financial system.
Under Governor Cuomo’s leadership, New York State has become a global leader on combating climate change and promoting clean energy. Governor Cuomo currently serves as a co-chair of the United States Climate Alliance, a bipartisan coalition of 25 governors formed after the U.S. federal government withdrew from the historic 2015 Paris Climate Agreement. In addition, the governor signed the Climate Leadership and Community Protection Act, including perhaps the most ambitious and aggressive greenhouse gas reduction target in the world, with New York aiming to reduce emissions by 85% by 2050.
DFS also collaborates with the insurance industry to address climate change by requiring our regulated insurers to have business continuity plans and submit annual disaster preparedness response plans to safeguard their operations. This helps to ensure they can continue serving customers during a disaster, and DFS provides guidance on how to do so.
NGFS is a group of nearly 50 central banks, supervisors, and international organizations that exchange experiences, share best practices, contribute to the development of environment and climate risk management in the financial sector, and to mobilize mainstream finance to support the transition toward a sustainable economy. Its purpose is to define and promote best practices to be implemented within and outside of the membership of the NGFS and to conduct or commission analytical work on green finance.
SIF is a network of nearly 25 leading insurance supervisors and regulators seeking to strengthen their understanding of and responses to sustainability issues for the business of insurance. SIF conducts surveys, issues reports on best practices, recommends, and provides input to the International Association of Insurance Supervisors on issues relating to sustainability, including climate change risks, and also provides advice to the World Bank Group and other international organizations.
“Today we are very pleased to welcome the NY State Department for Financial Services as a member of the Central banks and Supervisors Network for the Greening of the financial system,” said Frank Elderson, Chair of NGFS. “As this is the first member from the US in this group of the willing, I see this as another encouraging sign of growing global momentum for greening the financial system in the financial regulatory community.”
“The Sustainable Insurance Forum (SIF) is delighted to welcome the New York State Department of Financial Services as a member,” said Jeremy McDaniels, Head of SIF Secretariat. “The SIF looks forward to engaging the NY-DFS in collective efforts to strengthen supervisory oversight of climate risks facing the insurance sector, which are accelerating and intensifying. In 2020, the SIF will work with member supervisors to explore the implications of climate change for the insurability of assets, and the role for supervisors in supporting climate resilience across the financial system.”