October 05, 2020



The global pandemic, the financial crisis and the racial justice movement have gripped the world this year, knocking climate change out of the spotlight. But in these conjoined crises lies a glimmer of hope: The opportunity to build back our economy, nation and world better by creating a blueprint for a sustainable future.

With three simultaneous crises demanding attention, it may seem foolish to focus on another one, but Earth’s temperature continues to rise at an alarming pace. The 10 hottest years ever recorded have all occurred since 1998, with 2020 likely to be among the hottest. In May of this year, the concentration of carbon dioxide in the atmosphere increased to the highest level ever recorded in human history. This year’s record-breaking wildfire season on the West Coast is yet another reminder of the devastating consequences of climate change.

The aggregate cost of billion-dollar natural disasters in the U.S. more than quadrupled from the 1980s to the 2010s. For every 1-degree Celsius increase, the combined value of market and nonmarket damages across the U.S. economy is about 1.2% of the gross domestic product.

With the federal government’s Paris Accord withdrawal date imminent, it is more important than ever for states to take the lead to ensure the solvency and liquidity of the financial institutions they regulate.

New York state has become a global leader in combating climate change. Under the Climate Leadership and Community Protection Act, the state aims to reach a carbon neutral economy by 2050, and it recently announced the $50 billion Empire Building Challenge, which will improve the efficiency of existing multifamily and commercial high-rise buildings and significantly reduce their carbon footprint.

My agency, the state Department of Financial Services, is working with industry and other regulators to support New York’s efforts on climate change. We have urged the insurance industry to start factoring in the financial risks from climate change into all of its management, operations and business strategies. To help, we have established a comprehensive set of expectations on managing the risks from climate change.

There’s no time to waste. The U.S. has fallen behind Europe in climate-related regulation.

We are following international best practices in these efforts. To publicly demonstrate New York’s support for sustainable insurance aims, the Financial Services Department recently became a supporting institution of the United Nations Environment Programme Finance Initiative Principles for Sustainable Insurance.

And we’re here to help the industry catch up. We partnered with the New York State Energy Research and Development Authority to accelerate the creation of innovative insurance and financial products to speed up the development and deployment of key low-carbon technologies.

The Financial Services Department also is looking at climate change through the lens of consumer protection and racial equity and working on solutions there too. No one is immune to the risks posed by climate change, but it disproportionally affects disadvantaged communities, including low-income communities and communities of color, feeding into the vicious circle of social inequality.

As we work to recover from the pandemic and the financial crisis and address racial injustice, government and industry need to seize this opportunity to develop and integrate climate change policies that create an even more sustainable world for future generations.   

The clock is ticking. 

Linda Lacewell is the superintendent of the state Department of Financial Services and a member of Gov. Andrew Cuomo's Cabinet.