CFTC Commissioner Rostin Behnam named Robert Litterman as the chair of the newly launched Climate-Related Market Risk Subcommittee ("Climate Subcommittee"). Mr. Litterman is the founding partner and Risk Committee Chair of Kepos Capital.
Mr. Behnam also identified the other members selected for the 35-person Climate Subcommittee. The new members include experts from (i) the financial, energy and agricultural markets, (ii) the banking and insurance sectors, (iii) data and intelligence service providers, (iv) the public interest sector, and (v) a cross-section of academic disciplines.
As previously covered, the Climate Subcommittee is charged with preparing a report for the Market Risk Advisory Committee that will "identify and examine climate change-related financial and market risks." The Climate Subcommittee is expected to focus on:
issues concerning, or barriers to, assessing and managing climate-related financial and market risks;
ways in which market participants can improve the "integration of climate-related scenario analysis, stress testing, governance initiatives, and disclosures into financial and market risk assessments and reporting";
best practices for risk management and the disclosure of climate-related financial and market risks; and
how market participants' data and analyses can be improved to help with the assessment of climate-related financial and market risks and their potential effect on "agricultural production, energy, food, insurance, real estate, and other financial stability indicators."
The CFTC voted to establish a Climate-Related Market Risk Subcommittee under the CFTC’s Market Risk Advisory Committee.
CFTC Commissioners addressed the relationship between climate change and the global financial system.