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The US administration’s pushback on climate issues and firing of climate experts under President Donald Trump has given investors mixed signals and could impact the broader economy due to a lack of data and regulatory insight, experts have told Green Central Banking.
“It’s easier to make an ideologically driven decision, to ignore the problem as it’s growing and manifesting, if you don’t have the expertise in the room,” said Alex Martin, policy director of climate finance at Americans for Financial Reform.
Under Trump’s leadership, federal regulators have either limited or paused initiatives around climate change. Most recently, the US Financial Stability Oversight Committee (FSOC) disbanded two committees focused on the impact that climate change could have on the economy and financial stability, which advocates worry could leave regulators without key information for managing risks.
The FSOC has previously recognised the systematic threat of climate change and “choosing to ignore these risks isn’t just petty political posturing; it makes the financial system more fragile by weakening regulators’ ability to monitor and respond to cross-cutting threats that endanger Americans’ financial security,” said Jessye Waxman, campaign advisor at Sierra Club.
Meanwhile, the US Securities and Exchange Commission (SEC) paused its climate disclosure rules that would have required publicly traded companies to report their emissions data and has refused to defend its position in court.
Other jurisdictions, including in California and the EU, already require climate disclosure data or will do so soon. In California, for example, nearly 70% of companies that fall under requirements to report supply chain emissions data are headquartered outside the state.
Ripple effects on US economy
As other countries and regulators are working to mitigate climate risk, the administration has criticised climate change, with Trump calling it a “con job”. California’s disclosure rules are being challenged in court, while SEC chairman Paul Atkins recently threatened to ban European accounting rules from the International Financial Reporting Standards (IFRS) if the agency continues to pursue sustainability and climate issues.
European companies are allowed to use standards from the IFRS in lieu of the US’s Generally Accepted Accounting Principles. While the IFRS has established climate standards under the International Sustainability Standards Board (ISSB), these are separate from its accounting standards and one does not impose requirements on the other, an IFRS foundation spokesperson said.
These actions could have ripple effects across the US economy, said Allison Fajans-Turner, policy lead at the Rainforest Action Network, especially as the Trump administration has rolled back the Inflation Reduction Act.
“Climate change is a tremendous stress on the economy,” she said. Not only from physical impacts, but also from rising energy costs. Trump’s attack on clean energy is ultimately going to hit people’s bottom line and fall on the taxpayer as other countries increase their clean energy manufacturing, Fajans-Turner said.
“The US is ceding clean energy manufacturing to other countries. And this administration said they wanted to bring manufacturing jobs back to the United States. The actions that they’re taking are actually doing the opposite of that. Clean energy was one of the fastest growing sources of jobs, and by starving it of support and resources they’re actually squashing down that job market”.
Mixed signals for banks and investors
Moves such as the FSOC disbandment of climate groups is part of a general trend by the US government to sideline and dismiss experts, said Martin.
Both Trump and his administration have made claims about authoritative institutions and individuals without providing evidence to back them up. Claims by the SEC’s Atkins that the ISSB prevents the IFRS from setting reliable, independent account standards is no different.
“It’s almost like climate denial in a way,” said Martin.
Atkins’ comments ignore increasing calls for climate change impacts to be incorporated into financial statements which ultimately harms investors who aren’t aware of the risks coming from climate change, Martin said.
This has led to less interest in green projects such as renewable energy in the US even as the rest of the world has increased investment by 10%. Businesses are receiving mixed signals on how to comply with jurisdictions and become more sustainable without drawing the ire of the Trump administration which has shown it is “willing to attack businesses [and] individuals, for not participating in [the administration’s] denials of these realities around climate change,” Martin said.
US banks have responded to Trump’s anti-green stance by withdrawing from volunteer climate commitment groups like the Net Zero Banking Alliance, which has subsequently closed down. In addition, some companies have continued their green transition efforts without publicly talking about it, a phenomenon known as greenhushing.
Investors and companies in general want to make the highest return with the lowest risk possible, and investors are increasingly looking beyond the next quarter to the next 50 years, said Steven Rothstein, chief programme officer at climate thinktank Ceres.
“There are many banks and investors that are stepping away from public statements. They are doing the work, but they’re not talking about it,” he said.
There is increasing evidence that climate change is already having devastating impacts on the US economy. Data from the National Oceanic and Atmospheric Administration shows that the effect of extreme weather events has increased drastically since the 1980s. Meanwhile, a report from Ceres found that there is more risk on bank balance sheets from physical and transition risk of climate change than there was from the subprime housing crisis.
“Fundamentally, Mother Nature doesn’t know who’s elected president, and the fires and floods continue,” Rothstein said.
This page was last updated October 14, 2025
Written by
Moriah Costa is the Editor-in-Chief of Green Central Banking and has over a decade of experience writing about banking and finance. She is an award-winning American journalist based in Paris and has written for major international publications, including Reuters, The Guardian, and S&P Global. Having grown up in water-stressed Arizona, she has always had a strong interest in bringing awareness to climate and environmental issues.
