Share

CLIMATE ACTION PROGRAMME

9 April 2018

Progress is being made on greening finance, says Bank of England

The Governor of the Bank of England, Mark Carney, has told bankers to ramp up their focus on the financial risks posed by climate change.   

He said that increasing transparency and the available information on the issue can help the financial sector adjust before climate impacts become much more damaging in the future.

“Not everyone will agree on the timing or scale of the adjustments required”, he told a group of financiers at a climate risk conference in Amsterdam.

“And different people will have different views about the effectiveness of timelines of government climate policies. The right information allows sceptics and evangelists alike to back their convictions with their capital”.

The Governor made a point, however, of highlighting the progress made so far by financial institutions. Since the Paris Agreement was signed in 2015, a “transition in thinking has taken place” in the financial world. This was illustrated most keenly at the One Planet Summit in Paris last year where work to increase disclosure of the risks posed by climate change on financial institutions was supported by a group responsible for managing $80 trillion of assets. These include a variety of leading global banks, pension funds, asset managers and the largest sovereign wealth fund in the world.

Citing a recent PwC survey, Mr Carney also said that global companies are now much more aware of the risks posed by climate change, “whereas in previous years it barely registered as a risk, now close to a third of global CEOs are ‘extremely concerned’ about the threat climate change poses to their organisation’s growth prospects”.

2017 also saw a tripling of the number of shareholder resolutions which related to climate change, and the largest asset managers in the world, Blackrock and Vanguard, are now calling for increased disclosures. This work is spearheaded by the Taskforce on Climate-relate Financial Disclosures, which Mr Carney helped bring about, and is chaired by former New York City Mayor Michael Bloomberg.

The Governor ended on a positive note, stating how the transition to a low-carbon economy “is a major opportunity for investors and creditors. It implies a sweeping technological revolution, including investments in long-term infrastructure at roughly quadruple the current rate”.

 

Photo Credit: Peter Thwaite/CC

Related Articles

blog comments powered by Disqus

NEWSLETTER

TWITTER