Governor of the Bank of England ( BOE), Mark Carney is warning against the impact on the world’s financial sector caused by climate change.
Speaking at a recently held United Nations climate summit Carney said: “Climate disclosure must become comprehensive, climate risk management must be transformed and sustainable investing must go mainstream.”
The way Carney sees it, climate change is a clear and present danger and poses a threat to the stability of the global financial system.
To his mind, there is no doubt that extreme weather conditions like those seen by Hurricane Dorian can damage assets and hurt company performances.
The Governor of the BOE has repeatedly called for a reallocation of capital to stop global warning above the 2 degrees Celsius maximum target set by the Paris Climate Accord.
In an article published in the UK’s Guardian newspaper Carney said: “ As financial policymakers and prudential supervisors we cannot ignore the obvious physical risks before our eyes. Climate change is a global problem which requires global solutions, in which the whole financial sector has a central role to play.”
” If some companies and industries fail to adjust to this new world, they will fail to exist.”– Mark Carney, Governor of the Bank of England
Banks and financial institutions with over $47 trillion in assets vowed to adopt U.N. supported ‘responsible banking principles’ to counter climate change as companies look to turn away from fossil fuels.
“The world won’t get to net zero if the financial sector doesn’t know how companies are responding. To watch you need to be able to see, “ said the BOE boss.
Carney spelt it out succinctly earlier this year in an interview with Channel 4’s Jon Snow.
“ Now there is $120 trillion of capital behind that framework that is saying to companies: “Tell us how you are going to manage these risks – that’s the first thing.”
“The second thing the capitalist system needs to do is to manage the risks around climate change, be ready for the different speeds of the adjustment and then the most important thing is to move capital from where it is today to where it needs to be tomorrow. The system is very much part of the solution.
“Companies that don’t adapt – including companies in the financial system – will go bankrupt without question. But there will be great fortunes made along this path aligned with what society wants.”