The Federal Reserve Board announced today that it has joined the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) as a member.

The NGFS was established in 2017, with the purpose of helping to strengthen the global response required to meet the goals of the Paris agreement and to enhance the role of the financial system to manage risks and to mobilize capital for green and low-carbon investments in the broader context of environmentally sustainable development. Since its founding, the organization has grown from eight central banks and supervisors to more than 75 members and 13 observers across five continents. Until today, the Fed had been conspicuously absent as a member.

Federal Reserve Board Chair Jerome H. Powell said:

“As we develop our understanding of how best to assess the impact of climate change on the financial system, we look forward to continuing and deepening our discussions with our NGFS colleagues from around the world.”

The move marks a significant step forward in the US’s participation in global efforts to fight climate change. It also indicates the Fed’s acknowledgement of the risks to financial stability posed by climate change. Powell said early this year that the Fed would consider joining the NGFS, but cautioned at the time that that the central bank’s role in the climate fight must be limited, leaving the nation’s response up to elected representatives.