20 Jul 2025

FSB Eases Off Ambitious Climate Risk Agenda Following U.S. Exit

Tired Earth

By The Editorial Board

The Financial Stability Board (FSB) of the G20 has released a new plan outlining how to address climate-related risks. However, it has halted work on a broader set of measures and policies, following the withdrawal of the United States — a move that has tested ongoing efforts to establish a unified financial policy on climate risks.

The United States has pulled out of several working groups tasked with examining how climate-related events such as floods, wildfires, and major policy shifts could affect financial stability.

In its medium-term strategy, the FSB pledged to strengthen coordination and data sharing on climate-related financial risks.

Nevertheless, the Board noted that despite progress in integrating climate risks into financial systems, some of its members — including central bank governors and finance ministers — have expressed a desire to limit further work in this area.

In an update to its 2021 Climate Roadmap presented at the G20 Finance Ministers’ meeting in South Africa, the FSB stated: “While many members see a need for continued efforts, some believe that the work done so far is sufficient.”

Going forward, the Board will decide whether or not to pursue specific projects. Last week, Reuters reported that U.S. Treasury Secretary Scott Besant would not attend the upcoming G20 meeting, which the United States is set to chair next year.

The FSB confirmed it will continue to review climate-related topics annually and maintain its role as a coordinator of international efforts on climate risks.

However, the oversight body made clear that it has no plans to advance significant new policy initiatives for integrating climate-related financial risks into its regulatory and supervisory work, noting that this issue remains under review within several of its member institutions.

The Brussels-based think tank Finance Watch said the lack of reference to concrete regulatory measures needed to tackle climate risks marks a sharp retreat from the G20’s original ambitions — and a setback for multilateral cooperation.

Earlier this year, the FSB published a study on the feasibility of transition plans for financial stability, and in 2024, it issued an assessment of supervisory and regulatory work on nature-related financial risks.

Source :

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