CFTC chairman disavows 2020 climate risk report, dismantles climate risk unit

The chairman of the Commodity Futures Trading Commission said the commission would formally disavow the Market Risk Advisory Committee's 2020 climate risk report, dismantle the climate risk subcommittee and the climate risk unit, and withdraw the request for information on climate-related financial risk published on June 2, 2022.

‘‘The commission does not adopt, endorse, or rely on the findings or recommendations of the market risk advisory committee's 2020 climate risk report,’’ the chairman said, announcing the change in agency posture. He said climate-related risk ‘‘is fully addressed through existing authorities’’ under the Commodity Exchange Act and did not require a distinct regulatory regime.

The chairman instructed staff that the commission does not intend to pursue initiatives in response to the June 2, 2022 request for information and that the agency will refocus on ‘‘market integrity, customer protection, and price discovery’’ rather than what he described as ‘‘political pet projects.’’

The change affects the CFTC's internal advisory architecture rather than an immediate statutory rule change; the chairman described the move as a reallocation of agency priorities and directed staff accordingly. He also tied the shift to a broader enforcement and rulemaking agenda focused on fraud, manipulation and customer protections.

Next steps: the commission withdraws the specified RFI and will dismantle the climate risk unit and subcommittee; no new climate-related rulemakings in response to that RFI are planned, according to the chairman's remarks.