November 14, 2019

CFTC Commissioner Behnam Announces Members of the Market Risk Advisory Committee’s New Climate-Related Market Risk Subcommittee

Washington, DC — U. S. Commodity Futures Trading Commission Commissioner Rostin Behnam today announced the members of the new Climate-Related Market Risk Subcommittee (Climate Subcommittee) of the CFTC’s Market Risk Advisory Committee (MRAC). Commissioner Behnam is the sponsor of the MRAC.

Bob Litterman, founding partner and Risk Committee Chairman of Kepos Capital, will chair the 35-member Climate Subcommittee. The Climate Subcommittee is comprised of experts from financial markets, the banking and insurance sectors, as well as the agricultural and energy markets, data and intelligence service providers, the environmental and sustainability public interest sector, and academic disciplines singularly focused on climate change, adaptation, public policy, and finance. Each member has demonstrated expertise in one or more disciplines in which they have devoted significant time and consideration to the challenges presented by the risks of climate change.

“I am honored to join this effort to proactively identify and assess the financial market impacts of climate change, and to provide recommendations that are results-oriented, data-driven, and actionable on how best to mitigate those risks. Having spent my career focused on risk management, and most recently climate risk, I am encouraged that the CFTC is bringing the private sector, academia, and the public interest together on this urgent issue. I look forward to working with all members of the Climate Subcommittee,” noted Mr. Litterman.

“The Commission received 90 nominations for Subcommittee membership. The overall responsiveness to the creation of the Climate-Related Market Risk Subcommittee signals that this first-of-its-kind effort to provide a federal independent agency-sponsored forum to address climate-related financial market risks is well-timed to raise awareness on the urgency of taking action. Addressing the near- and long-term impacts of climate change on our financial markets and the greater economy requires an unprecedented level of coordination. In choosing the Climate Subcommittee members, I sought to balance representation across participants of the derivatives and larger financial industry, cutting edge climate and sustainability research and analysis, and the highest level of risk management expertise. I aim to ensure that those who are most vulnerable to the physical and transition risks associated with climate change will benefit from the output of this Climate Subcommittee,” said Commissioner Behnam.

The Subcommittee was established to provide a report to the MRAC that will identify and examine climate related financial and market risks. Topics and issues this Subcommittee may consider include, but are not limited to, the following:

• Identifying challenges or impediments to evaluating and managing climate-related financial and market risks;
• Identifying how market participants can improve integration of climate related scenario analysis, stress testing, governance initiatives, and disclosures into financial and market risk assessments and reporting;
• Identifying policy initiatives and best practices for risk management and disclosure of financial and market risks related to climate change that support financial stability; and
• Identifying appropriate methods by which market participants’ data and analyses can enhance and contribute to the assessment of climate-related financial and market risks and their potential impacts on agricultural production, energy, food, insurance, real estate, and other financial stability indicators.

“As we continue to encounter more frequent extreme weather events, and to formulate plans to adapt to changes in average climate conditions, I believe—without hesitation—that taking these first, critical steps towards achieving long term resiliency to climate change can prevent us from paying the costs of responding ad hoc to likely indicators that may spark the next financial crisis,” said Commissioner Behnam.

See full list of MRAC Climate-Related Market Risk Subcommittee members under Related Links.

-CFTC-