Climate-Related Financial Risk

The order directs the National Economic Council and National Climate Advisor, in coordination with Treasury and OMB, to develop a comprehensive government-wide strategy for measuring, disclosing, and mitigating climate-related financial risk within 120 days. It instructs the Secretary of the Treasury to engage the Financial Stability Oversight Council (FSOC) — a body that coordinates federal financial regulators — to assess systemic climate risks and report to the President within 180 days. It directs the Secretary of Labor to identify actions to protect workers' retirement savings from climate-related risk, consider proposing a rule to revise 2020 regulations that restricted the use of environmental, social, and governance (ESG) factors in pension investing, and submit a report within 180 days. It reinstates Executive Order 13690, restoring the Federal Flood Risk Management Standard that had been revoked in 2017.

The Federal Acquisition Regulatory Council is directed to consider amending federal procurement rules to require major suppliers to disclose greenhouse gas emissions and set science-based reduction targets. Agencies managing lending programs — Agriculture, HUD, and VA — are directed to consider integrating climate risk into underwriting standards. OMB is directed to incorporate climate risk into the President's annual budget projections. Most directives require agencies to study, plan, or propose rather than immediately impose new rules; actual regulatory changes depend on future rulemaking processes.

Federal agencies managing investments, lending, and procurement; workers and retirees whose pensions are governed by ERISA or the Federal Employees' Retirement System; major federal contractors and suppliers who may face new greenhouse gas disclosure requirements; private insurers in climate-vulnerable regions; and state and local governments subject to the reinstated flood risk standard.

Federal workers' retirement savings could gain new protections if Labor revises the 2020 ESG pension rules. Major federal suppliers may face greenhouse gas disclosure mandates if procurement regulations are amended. Federal lending programs for housing, farm loans, and veterans could incorporate climate risk into loan terms, affecting borrowers in high-risk areas.

Several workstreams run in parallel: the NEC and National Climate Advisor produce a 120-day government-wide strategy; FSOC produces a 180-day climate risk report; the Secretary of Labor produces a 180-day pension protection report. All reports route through the NEC and National Climate Advisor to the President. The FAR Council and lending agencies are directed to "consider" changes rather than make them immediately, meaning actual rules require separate notice-and-comment rulemaking. OMB budget oversight provides the primary ongoing accountability mechanism. The reinstated flood risk standard is the only provision that takes effect without further action.