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Central banks like the European Central Bank (ECB) have started incorporating climate change considerations into their monetary policy tools. This Note refers to this phenomenon as green monetary policy (GMP). Given the crucial role of central banks and other monetary authorities in bank supervision and regulation, GMP has emerged as a solution to tackle the continued financing of fossil fuels and industries that have accelerated climate change. Among central banks, the ECB has emerged as a leader in GMP. However, the United States Federal Reserve Board (the Fed) has signaled a refusal to engage in any climate policymaking, including GMP. This paper argues that the Fed should follow the ECB by implementing GMP, given the central banks’ similar structure, general tools of monetary policy, and monetary policy-related goals. Although the Fed, unlike the ECB, does not have a secondary mandate to support general economic policies including environmental and climate-related goals, the Fed and the ECB are both mandated to promote price stability and act as a supervisor of financial risk. This Note analyzes the implications of the potential implementation of GMP by the Fed, comparing it to the ECB’s GMP, structure, and statutory mandates. It also explores key concerns and counterarguments in the literature against Fed implementation of GMP, which deal with independence, accountability, and mission creep. Despite these concerns, the Fed should continue to research climate change’s impact on macroeconomic stability and apply climate change considerations in its collateral policy, as the ECB has already done.

Modern capitalist theory has been the engine of Western innovation and prosperity for centuries. However, the persistence of the free market and corporate form in the United States has come at a high cost. Industrialization powered by fossil fuels has permanently degraded and destabilized the Earth’s climate, wealth continues to concentrate among a handful of individuals, and increasing nativist and anti-immigrant sentiments threaten our institutions. This has led scholars to draw parallels between the current day and the Gilded Age, a period of massive wealth inequality during which the negative externalities of unfettered capitalism became particularly clear. This Note is situated in the rapidly expanding literature about environmental social governance (ESG) and stakeholderism, looking to past instances of corporate reform as well as the present realities of the modern-day corporation to argue that private ordering is an ineffective and improper means of addressing negative externalities of capitalism. It identifies moments of proto-stakeholderism during three periods: the Gilded Age, Progressive Era, and stock market crash of 1929, highlighting the cyclicality of addressing stakeholder concerns throughout history. It critiques two major avenues through which corporations might consider stakeholders—private ordering or government action—and argues that private ordering’s legal limits and legitimacy problems are inescapable when considering transformational ESG reform.