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Climate Risks Ignored: What Trump’s Executive Order Repeals Mean for America’s Financial Stability

Reversing Biden’s push to integrate climate risk across the federal government and financial system could rebound on the Trump administration

Author

Louie Woodall
January 23, 2025

TL;DR

  • On his first day in office, President Trump rescinded a Biden-era Executive Order (EO) that had advanced climate-related financial risk management across federal agencies and financial institutions

  • Under EO 14030, federal agencies examined how extreme weather events could impact public assets and financing programs, and put in place rules and guidance to harden the financial system against climate shocks

  • Climate advocates warn that the rollback of this order could make the federal government more vulnerable and exposed to risks, and could end up costing American taxpayers

  • It could also undermine Trump’s “America First” agenda, by complicating his efforts to strengthen infrastructure and lower the cost of living

Amidst the bonfire of Biden Executive Orders (EOs) lit by the newly-inaugurated President Trump this Monday were a number crafted to make the federal government and financial system more resilient to climate shocks. Experts say their repeal may increase the federal government’s exposure to climate-related financial risks and render the country’s complex network of banks, insurers, and public finance bodies more vulnerable to crises.

“Ignoring climate-related financial risk is paving a path for the kind of financial crash that we saw in 2008 or worse, and that’s going to affect all Americans — which is extremely antithetical to what this administration was purportedly elected on, which was reducing the cost of living and supporting working class families,” says Ernesto Archila, a Policy Director with Public Citizen’s Climate Program.

Archila is talking specifically about EO 14030, an order on managing climate-related financial risks issued by then-President Biden in 2021. This directed agencies to develop a strategy for measuring and reporting climate-related financial risks to the federal government. It also called on US financial regulators to report on their efforts “to integrate consideration of climate-related financial risk in their policies and programs”. 

Excerpt From Executive Order 14030

Climate advocates rejoiced on the EO’s release. Ben Cushing, Financial Advocacy Campaign Manager at the Sierra Club, said at the time that the order showed “that corporate disclosure and voluntary commitments alone are not sufficient for addressing systemic climate risks and that regulators must act.”

In rescinding the order, Trump’s administration took a very different tone, claiming that EO 14030 and orders like it were forms of “[c]limate extremism” that had “exploded inflation and overburdened businesses with regulation.” 

Now the order is dead and buried, experts are concerned the limited progress on climate-related financial risk it achieved will be rolled back — with potentially disastrous implications for the federal government and the stability of the US financial system.

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