The US Federal Reserve has withdrawn from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS).

“While the Board has appreciated the engagement with the NGFS and its members, the work of the NGFS has increasingly broadened in scope, covering a wider range of issues that are outside of the Board’s statutory mandate,” the bank stated.

Anadolu reported that the network launched in 2017 during the Paris One Planet Summit on a voluntary basis to share “best practices and contribute to the development of environment and climate risk management in the financial sector and to mobilize mainstream finance to support the transition toward a sustainable economy.”

The Fed joined the NGFS in 2020, which has more than 160 members and observers.

According to Reuters, In recent years, the Fed had taken some steps to integrate climate change into its work via preliminar analysis and reports, but Chairman Jerome Powell has repeatedly insisted that the Fed has a limited role to play. Powell has maintained the Fed is not responsible for setting climate change policy, and the matter lies in the hands of Congress.

“Republicans in Congress have been skeptical of any regulatory efforts to police climate risk in the banking sector, and Trump’s impending takeover in Washington has spurred similar exits in the private sector. Also on Friday, Bank of Montreal became the first Canadian bank to anounce its exit  from the Net-Zero Banking Alliance, a private-sector climate alliance,” Reuters said.

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