President Biden issued an Executive Order on May 20, 2021, with regards to assessing, measuring, and mitigating climate risk in the financial system. While it is clear that there will be more to come, this Executive Order provides some clarity around where the Administration intends to focus its efforts as it pertains to climate-related financial risk. Here are some opportunities that may present themselves to investors over the next few years.

The European Central Bank (ECB) made headlines when they committed to funding 30% of their covid stimulus with green bonds. They will also start buying sustainability-linked corporate bonds as part of their quantitative-easing program and accept them as collateral for loans to commercial banks. The green bond market, which was already exploding with little help from the U.S. government and regulators, will double in size with the plans laid out by the ECB.