Don’t expect the Federal Reserve to wade into the climate change fray. Fed Chair Jerome Powell made clear Tuesday that the banking system does not have a significant role in the space.

“We are not, and will not be, a ‘climate policymaker,’” Powell said. “We should ‘stick to our knitting’ and not wander off to pursue perceived social benefits that are not tightly linked to our statutory goals and authorities.”

The Federal Reserve has a dual mandate from Congress: Maximum employment and stable prices. Managing climate change risk isn’t on that list. But in the increasingly politicized climate of banking, where global institutions consider how climate change could threaten the financial system, the Fed finds itself between a rock and a hard place.

Republicans on the Senate Banking Committee have previously expressed concern that the Fed may, “use financial regulation and supervision to further environmental policy objectives. That would be beyond the scope of the Federal Reserve’s mission.”

Meanwhile, Democratic Sens. Sheldon Whitehouse and Jeff Merkley opposed Powell’s nomination to Fed Chair in 2021, saying he didn’t share, “the Administration’s view that fighting climate change is the responsibility of every policymaker.”

From Powell’s statements, his point of view is that the Fed’s climate role is very narrow, limited to making sure banks understand and manage all material risk, including financial risks of climate change.

“But without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools, for example, to promote a greener economy or to achieve other climate-based goals,” he said, adding that any attempt to do so would harm the Fed’s independence.

At least one Fed governor disagrees with Powell in the Fed having even a narrow scope to climate change.

“Climate change is real, but I disagree with the premise that it poses a serious risk to the safety and soundness of large bans and the financial stability of the United States,” Fed Governor Christopher Waller said in December. “The Federal Reserve conducts regular stress tests on large banks that impose extremely severe macroeconomic shocks and they show that the banks are resilient.”