The White House may not be preparing to transition to a Biden administration, but Wall Street is.

While President Trump and other Republican leaders continue to dispute the election results, the financial sector is moving ahead with plans to begin the transition to a carbon-free economy and acknowledge a new administration that’s eager to tackle the climate crisis.

Investors are increasingly putting their money into funds geared toward either excluding the fossil fuel industry entirely, or underweighting high-carbon companies in their mix. 

A growing number of major banks and other money managers have committed to net-zero emissions by 2050 and have pledged to disclose exactly how their finances contribute to climate change, as well as which of their assets are at risk from its impacts. And last week, the U.S. Federal Reserve said for the first time that failing to address climate change would put the nation’s finances at risk and its economy at a global disadvantage.

For years, analysts have been saying that the global economy is shifting away from fossil fuels and toward renewable energy, with or without the United States. Clean energy saw an expansion this year despite a global drop in energy demand because of the pandemic, the International Energy Agency said last week, and renewables are likely to expand nearly 50 percent by 2025.

Now, as President-elect Joe Biden prepares to take office in January, global finance leaders are again calling on the United States to provide some kind of federal guidance for companies in regard to climate change, especially as other parts of the world begin taking major regulatory action.

Last week, the United Kingdom announced that within five years, all major companies and financial institutions doing business in the country would be required to measure and disclose their climate risks and greenhouse gas emissions—a move met with wide support from the financial industry.

That same week, at a global summit dedicated to making coronavirus bailouts “green,” BlackRock CEO Larry Fink welcomed the UK’s announcement and urged the United States to “move faster so that we can achieve greater global coordination” on tackling climate change.

The Trump administration has ignored or actively worked against efforts to address climate change, including in the financial sector. In October, the Department of Labor finalized a rule that would make it harder for managers of retirement plans to put money into ESG funds—investment funds that attempt to do “social good,” by taking environmental, societal and corporate governance factors into account. That rule was met with objections from many in the investment community, who said the Trump administration was misreading investment trends and preferences. 

On Nov. 4, Trump completed a process he set in motion in June 2017 when he officially led the U.S. out of the Paris climate accord, which analysts say would have also pressured the financial sector to plan for a transition away from fossil fuels.

President-elect Biden has said that he would start the process for the United States to rejoin the international climate pact once his term began, and that he would issue an executive order that would require all public companies reporting to the Securities and Exchange Commission to disclose any emissions tied to their operations, as well as the financial risks associated with global warming.

Those moves would be important since they don’t require Congressional approval and Biden could face a Republican-led Senate during his first term that would be resistant to any national climate legislation. Control of the Senate will be determined by two Senate runoff elections in Georgia on Jan. 5. Democrats would need to win both races to control the chamber.

For investors, an executive order from Biden would also help quell fears that U.S. companies, especially in the energy sector, will become increasingly poor investments as oil prices continue to fall and the rest of the world moves more quickly toward a low-carbon economy, said Danielle Fugere, president of the investor advocacy group As You Sow.

“These are global companies that sell to a global market,” Fugere said. “If the rest of the world isn’t buying what you’re selling, you become increasingly uncompetitive.”

Even without federal guidance, several major U.S. companies and banks, including JPMorgan, Wells Fargo and Citigroup, have already pledged to disclose how their finances are affecting climate change. Roughly 15 percent of Fortune 500 companies have joined the Task Force on Climate-Related Financial Disclosures, the climate disclosure initiative that BlackRock helped launch in 2015, said Steven Rothstein, managing director of the Ceres Accelerator for Sustainable Capital Markets, a nonprofit focused on sustainability issues.

Many climate activists see those pledges as not going far enough, especially since most of the banks are still pumping hundreds of billions of dollars into fossil fuel development. Between 2016 and 2019, JPMorgan alone provided $269 billion to oil and gas projects, according to the environmental nonprofit Rainforest Action Network.

But banks and other companies are making the pledges, in part, because there’s been a lack of federal regulation, said Michael Vandenbergh, a law professor and the director of Vanderbilt Law School’s Climate Change Research Network. It’s important to encourage continued climate action from the private sector, which often implements decisions more quickly than governments do because companies are less hindered by political hurdles, he said.

Ceres’ Rothstein agrees. And if the Biden administration can move any kind of federal regulation forward, it would help speed up the clean energy transition and get everyone on the same page, he said.

“If we don’t make systemic changes, the stability of our financial institutions—there’s significant question there,” Rothstein said. “That’s why it’s important for the financial regulators to do their job.”