How many Americans actually know what the Federal Reserve is? Even though the Fed is the “referee” of the US economy and meant to manage risk (which should include climate risk), it is often insulated from public opinion. We set out to change that and leverage our grassroots power to hold the Fed more accountable.
by Emily Park, Fossil Free Federal Reserve Campaign Manager
What’s the Deal with the U.S. Federal Reserve?
The Federal Reserve System of the United States…How many Americans know what that is, let alone what it does? It’s mysterious, and it’s tremendously powerful in shaping monetary policy and the financial system of the US.
I’ve been involved with efforts to convince Chase Bank to stop using its customers’ money to fund the climate crisis for years, and it feels like the bank CEOs refuse to take notice. When I learned that there was a way that a US government agency could step in to protect our economy from these reckless actions, I was finally excited to learn what the Federal Reserve (“the Fed”) is. And that’s where 350 US’ Fossil Free Federal Reserve campaign came in.
The Fed is the central bank of the US. In a nutshell, that means it’s the referee of the US economy. It’s their job to protect the stability of our financial system and our economy by ensuring that banks act responsibly. Other central banks around the world – particularly the European Central Bank, which oversees the entire Eurozone – have clearly identified the climate crisis as a direct threat to economic stability, and have started to take action. But the Fed has continued to lag, claiming that this “isn’t part of their mandate”.
Targeting the Fed: Why Does it Matter?
The Fed might have felt like an unusual target for 350.org’s U.S. team. But when we launched this campaign in 2021, we were at a pivotal moment:
- The public’s awareness of fossil fuel financing was growing
- President Biden had come into office with major climate promises, and we wanted to leverage that across institutions, including the institution that controls fiscal policy in the United States. If the Fed accounted for climate risk and set guidelines for banks lending to fossil fuel companies, we could put a significant dent and end to fossil fuel financing.
- The Fed was primed for a shift in leadership, and major legislation — the Fossil Free Finance Act — was introduced in Congress.
Usually the Fed is considered to be “apolitical” and is somewhat insulated from public opinion, but we finally had a moment where we could leverage our grassroots power. President Biden needed to nominate candidates to fill key roles on the Fed’s Board – including Board Chair and Vice Chair of Supervision. These candidates needed to be confirmed by members of the Senate Banking Committee and then confirmed by Congress, so it was the perfect moment to call for every climate-concerned American to contact their elected representatives. Additionally, the Fossil Free Finance Act — a key piece of legislation that would have significantly limited US banks’ ability to finance fossil fuel projects — was being introduced in both the House and the Senate.
A Wonky but Winning Campaign
I’ll be honest. This has been a challenging campaign because it’s wonky and extremely technical. But it has also been a deeply rewarding campaign. We’ve connected with partners, communities, and organizations across the US who have all been involved in efforts to stop the flow of money from Wall Street to the climate crisis, and we’ve used the Fossil Free Federal Reserve campaign to add new dimensions to local fossil fuel financing efforts.
As our campaign took shape, examples of how the climate crisis was impacting the economic and financial well being of the US were everywhere: unprecedented wildfires, droughts, flooding, storms, and more. The climate crisis is clearly not a future, theoretical threat: it’s here NOW, and some of us are feeling the effects much worse than others. While Wall Street CEOs get rich off of their fossil fuel profits, frontline, low-income, and BIPOC communities are actively suffering.
I’m so proud of the amount of pressure that we were able to put on President Biden and Congress to nominate and confirm climate champions to positions of leadership in the Fed. Even though our preferred candidate wasn’t selected, we played a MAJOR role in making climate a part of the debate. We’ve pushed Chair Powell into a position of having to constantly talk about what he feels the Fed’s role is, which further highlights that our messaging and demands are finally starting to get through.
Our campaign had a truly inspiring final six months. In August 2022, we gathered at the Fed’s annual Jackson Hole Economic Symposium – its first gathering since 2019. A crowd of 100+ activists gathered in Jackson Hole – one of the most economically divided communities in the country, with some of the US’ most iconic landscapes as a backdrop – to rally at this gathering of many of the world’s most significant economic leaders. Our demonstrations made national news and helped spread awareness of the connection between the Fed’s work and the climate crisis. We even had the chance to speak directly to Chair Powell – and although he was not willing to engage with us, we made it clear that we expect action. And just a month later, Vice Chair of Supervision Barr announced that the Fed would be starting a climate risk scenario analysis process.
The Fed Proposed Climate Guidance
In December 2022, the Fed released a draft of its proposed climate guidance principles for major banks and hosted a formal public comment period. We mobilized our base, and thanks to your support, nearly 15,000 grassroots comments were submitted to the Fed – truly unprecedented for an institution that’s used to only hearing from policy experts, academics, and politicians.
As an organizer for the Fossil Free Fed campaign, I’ve learned so much. This campaign reiterated the importance of a multi-institutional approach to climate. We won’t achieve the change we need by focusing only on the banks, or only on Congress. We need action from every institution that holds power in the US. I’ve also been awed by the power of grassroots movements, particularly when we seize moments of opportunity to challenge institutions that are traditionally inaccessible.
We’ve made huge progress on getting the Fed to consider climate risk, and on making their work more visible to the public. At this point, our main actions for this campaign are complete, though we’ll keep monitoring Fed activities and can always reassess when we might need to activate. And alongside resistance campaigns we will be turning, as many of our movement partners are, to using our limited resources and grassroots power for advocating for real, sustainable, and community-minded solutions to the climate crisis.
I’m so grateful to have had the opportunity to work and learn with everyone who has participated in the Fossil Free Fed campaign. I look forward to seeing where 350 US goes next!
If you are inspired to take the next step forward finance campaigning, 350.org has a wide range of resources to help you get started on campaigning and organizing. Check out the resources section of the Fossil Free Federal Reserve and our demands to learn more about how we campaigned for a Fossil Free Federal Reserve.