On Tuesday, three major federal financial regulators released joint guidelines on the steps banks must take to prepare for a climatic assault on their balance sheets. 
 

The potential risks are dire, wrote representatives of the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. 
 

The regulators focused on two ways that a warming climate could lead to financial upheaval. The first was physical damage from floods, fires and storms, while the second involved the “transition risk” related to broad economic changes and slow shifts away from fossil fuels. 

In both cases, these “pose an emerging risk to the safety and soundness of financial institutions and the financial stability of the United States,” the agencies wrote. 
 

The three regulators collectively called on bank boards to take concrete steps to “control [their] exposure” to the financial risks of climate change. 
 

The regulators also urged banks to conduct a “scenario analysis,” in which they would forecast what could happen to their investments — and, by extension, the deposits they hold — under circumstances of extreme climate disruption. 
 

Progressive watchdog group Public Citizen offered qualified praise of the new guidelines. 

“These principles have taken far too long to produce, but they are a solid start,” group climate director David Arkush said in an emailed statement. 
 

But Arkush noted that the devil would be in the details.  

For example, he called on federal regulators to give banks more specific guidance on what kind of climate scenarios to incorporate, as well as how to create “credible” strategies to meet their decarbonization goals.  
 

Republicans have long equated proposed guardrails around climate risk with an assault on U.S. oil and gas, and GOP congressional members attacked the new proposal. 
 

“Banks were not created to be arbiters of public policy, but now environmental activists have seized our nation’s financial regulators and are inserting their political preferences into the equation,” Sen. Kevin Cramer (R-N.D.) said in a statement.  
 

Cramer cited North Dakota’s “innovative clean-energy” solutions as evidence that such guidelines are unnecessary. The state gets about 6 percent of its energy from renewables, which include carbon-emitting biofuels.  
 

For the sake of comparison, the state gets 8 percent of its energy from coal, and the lion’s share of the rest from oil and gas. 
 

But the agencies said that they had stayed far away from activism.  
 

They emphasized in their statement, for example, that they had ignored public comments calling for them to “promote a transition to a lower carbon economy” — something that they argued went beyond regulators’ role.  
 

If banks wanted to keep funding oil and gas, regulators implied, that was their business — so long as the risks were properly accounted for. 
 

“If banking regulators and the Financial Stability Oversight Council pick up the pace, they might still prevent climate-related financial crises,” Arkush said. 

Welcome to The Hill’s Sustainability newsletter, we’re Saul Elbein and Sharon Udasin — every week we follow the latest moves in the growing battle over sustainability in the U.S. and around the world.

Illegal hunting and trade practices in China are not only imperiling domestic biodiversity, but they also pose a threat to global public health, a new study has found.  

Since such lawless activity is common nationwide, so too is the prospect of disease transmission from hunted animals to people, according to the study, published on Wednesday in Nature.  

International threat: The risk of such disease propagation — which scientists assume contributed to the coronavirus outbreak — does not stop at China’s borders, the study authors warned.  

“The rest of the world should also be concerned,” corresponding author David Wilcove, a professor of ecology, evolutionary biology and public affairs at Princeton University, said in a statement.  

Crossing borders: Biodiversity loss in China means biodiversity loss for the entire world, Wilcove noted. 

• In addition, there is no reason to assume that this problem is unique to China, he said.
• As far as diseases are concerned, wildlife trade-related outbreaks “have the potential to escape the borders of any one country,” he added.  

Reading between the lines: To understand the extent of both threats, the researchers used Chinese court documents that detailed convictions for illegal hunting around the country.  

They then created a series of models to estimate how much illegal hunting is actually occurring — including instances that are not getting caught.  

Endangered animals in the mix: The court documents showed a total of 9,256 convictions for the illegal hunting of more than 3 million individual animals from 2014 to 2020, according to the study.  

• These animals included representatives of more than 20 percent of China’s bird, mammal, reptile and amphibian species.
• Nearly a quarter of the species in these categories were endangered.  

‘The tip of the iceberg’: “We were very surprised by the large number of species that were illegally hunted in the space of just six years,” lead author Dan Liang, an associate research scholar at Princeton’s School of Public and International Affairs Center, said in a statement.  

• Because these results are only a small fraction of total hunting incidents, the findings represent just “the tip of the iceberg,” according to Wilcove.
• “And so, we then applied various statistical methods to show that, in fact, the iceberg is very large indeed,” Wilcove added.  

Accounting for future threats: By extrapolating from their data, the authors assumed that 10 percent of all illegal hunting incidents were detected and prosecuted.  

• They concluded that at least 28 percent of China’s native terrestrial vertebrates, including 40 percent of its birds, may have been among those taken.
• The scientists also identified another 781 species, of which about 90 percent were threatened, that would likely be targeted by hunters over the next six years.  

Some positive action underway: Stressing that illegal hunting is a clear threat to China’s wildlife, Liang also recognized the country’s progress in addressing the issue.  

• The government amended its protected animals list by adding 517 species, including 31 endangered ones.
• During the early days of the pandemic, the country also enacted a ban on the consumption of “wild-caught species.”  

A complex quest: But hunting and trade remains common and is most concentrated near urban centers — likely for commercial and resale purposes, the authors noted.  

“Illegal activities are inherently very difficult to study because, by definition, people don’t talk about them or practice them out in the open,” Wilcove said.  

“It’s quite a scientific challenge,” he added.