Reps. Tlaib, Cleaver Introduce RESPOND Act To Protect Federal Pensions, Measure Economic Impact of Climate Change
(Washington, D.C.) – Today, United States Representatives Rashida Tlaib (D-MI) and Emanuel Cleaver, II (D-MO) introduced the Restructuring Environmentally Sound Pensions in Order to Negate Disaster Act of 2020 (RESPOND Act) to protect federal pensions from the economic impact of climate change by establishing a Federal Advisory Panel on Climate Change within the Federal Retirement Thrift Investment Board (FRTIB). The bill would also require the Board of Governors of the Federal Reserve System and Securities and Exchange Commission (SEC) to issue an annual report projecting and accounting for the economic costs caused by the impacts of climate change.
“Our federal workers do not deserve to be set up to fail by being forced to invest their hard-earned savings in corporate polluters that endanger our public health,” Congresswoman Tlaib said. “Communities like the ones I represent deserve to have the Federal Reserve and other financial systems address the economic costs of climate change. Lives of countless people around the world and the life of our planet depend on it. That's why I'm proud to introduce the RESPOND Act with Congressman Cleaver. I thank him for his partnership in this and look forward to working together to see this much-needed legislation is made law.”
“Climate change is not only a long-term threat to the health of our planet, but also a current threat to Americans’ retirement portfolios,” said Congressman Cleaver. “With the RESPOND Act, Congresswoman Tlaib and I are calling on financial regulators to examine the economic costs of a changing climate and to utilize this data to make sound investments on behalf of more than 5.5 million federal employees. As the world continues to evolve and transition from the fossil fuel industry, it only makes sense for the investment portfolios of federal retirees to do the same in order to avoid catastrophic losses in the future.”
"Forcing federal employees to invest their savings in the fossil fuel industry threatens both the future of our planet and the bottom line for these workers saving for retirement," said Kelly Martin, Director of the Sierra Club's Beyond Dirty Fuels campaign. "We applaud Representatives Cleaver and Tlaib for their leadership in recognizing the serious financial risks associated with the climate crisis and protecting workers from those risks."
"It is high time that the Federal Reserve and the Securities and Exchange Commission properly account for the real cost of climate change on our economy,” said Natalie Meban, U.S. Policy Director of 350.org. “Climate change has always been the biggest economic threat to this country and our world. It is time to follow the science and know that we cannot have a healthy economy without a healthy climate."
“Climate change presents numerous near and long-term risks to financial systems worldwide and, in turn, pension holdings and public sector portfolios. The RESPOND Act of 2020 does just that—respond—by illuminating risks that would remain invisible without special inquiry, thereby taking another step toward protecting the underlying value of investments on which so many hard-working people depend,” said Paula DiPerna, Special Advisor, Carbon Disclosure Project.
"The RESPOND Act will address important issues for federal pension plan and financial regulators to address climate risks and climate opportunities. We congratulate Congressman Cleaver and the other sponsors for moving this vital legislation forward," said Steven M. Rothstein, Managing Director, Ceres Accelerator for Sustainable Capital Markets.
The FRTIB currently oversees $565 billion in retirement benefits for over 5.5 million federal employees. In order to protect the pensions of these retired federal workers, the RESPOND Act would commission the FRTIB to establish a Federal Advisory Panel on Climate Change, consisting of a combination of climate finance experts and labor representatives, to conduct a thorough examination of the financial risks posed by climate change. After examining the report issued by the Panel, if the FRTIB determines pension yields would be both financially profitable and consistent with the FRTIB’s fiduciary duties should they implement low-carbon investment strategies, then the FRTIB is instructed to immediately set a plan in place to transition their investment practices accordingly.
Separately, to ensure the federal government is doing its due diligence to fully understand and account for costs and risks of climate change, the RESPOND Act would also require the Federal Reserve and SEC to jointly issue annual reports to Congress that account for the financial risks of climate change to the American economy. Critically, this information would also be made public to financial institutions across the country as they seek to adjust their investment strategies to account for climate change, something the Federal Reserve has recently called for.
The RESPOND Act is endorsed by Sierra Club, Center for International Environmental Law, Ceres, 350.org, World Wildlife Fund, the Center for Biological Diversity, Catholic Network U.S., Rapid Shift Network, Earth Guardians, Mazaska Talks, Giniw Collective, Fossil Free California, Climate Hawks Vote, Texas Campaign for the Environment, and Zero Hour.
You can find the official text of the RESPOND Act here.