Historically the federal government has done very little to push banks to address climate risk in the financial system. The last major wave of environmental legislation passed in the 1960s and 1970s, when banks were nowhere near as big as they are now. Back then, the primary targets of anti-pollution laws were corporations that were actively generating emissions or had dumped toxic waste that needed to be cleaned up. This made sense, given that manufacturing and chemical firms were still at the top of the Fortune 500 list in 1977, while financial firms were not. Banks simply did not receive the same scrutiny as firms in the industrial sector.

Changes in the banking sector over the past half-century have produced dramatic consolidation, making a handful of big banks outsize financial engines in the fossil fuel industry. So long as these large banks and financial firms continue funding major fossil fuel development, environmental activists argue, addressing climate change will be impossible. And policymakers are now beginning to heed their calls.