Bank of England’s Carney: Business must come clean quickly on climate

Mark Carney, Governor of the Bank of England, believes that major companies need to p
Short Url
Updated 15 February 2020

Bank of England’s Carney: Business must come clean quickly on climate

LONDON: Bank of England Governor Mark Carney called on the world’s businesses to publish strategies for cutting carbon emissions and adopting cleaner power sources by November, when world leaders meet in Scotland for UN-led climate talks.

“It’s not just green assets and divestment campaigns or certain things are so brown or black. Every company ultimately has to have a plan for a transition and what the opportunities are and where the risks are,” Carney said.

“For Glasgow that must be well on the path. That that is the norm. That the question doesn’t even have to be asked because companies are answering that question as part of their strategy.

“And the answer is, it’s the transition, stupid,” he said, referencing a phrase coined by former US President Bill Clinton’s election strategist in reference to the US economy.

Carney was speaking to Reuters a month before he leaves his nearly seven-year posting at the helm of the UK’s central bank to take a new role as the UN envoy for climate.

The Canadian banker, who disarmed the British insurance industry in 2015 when, in a speech called “Tragedy of the Horizon,” he warned of their exposure to climate-related events, has been one of the most vocal public figures to push for better supervision and disclosure of climate risk.

The Task Force on Climate-related Financial Disclosures (TCFD), which he launched in 2015, has become a global standard that more than 1,000 companies, financial firms, governments and other organizations have adhered to.

But it remains voluntary, and it can be hard to compare and verify the claims of disclosures.

Hammering out a common set of global reference points on climate-related disclosures is seen by many as a crucial step to helping investors allocate capital more effectively.

Money would flow to those companies managing the risks — and therefore likely to perform better in the transition to a low-carbon economy — and away from those in danger of being impacted more severely.

Carney said November’s COP26 climate talks would also be a good deadline for regulators to map out how to make the TCFD framework compulsory.

“One of the things we will look at ahead at for the COP26 is ‘should we have pathways to make the TCFD mandatory?’ Not overnight, but through listing requirements or securities regulation disclosure standards,” he said.

Such an effort needs to be global, Carney added, encompassing regions laying out their own plans for cutting emissions. The EU recently announced a 1 trillion euro ($1.08 trillion) effort become carbon neutral by 2050, a strategy that includes introducing a new climate law by next month.

“It would be productive if other jurisdictions that potentially will have mandatory disclosure standards ... used more conventional routes than legislation, such as securities regulations or listing standards. Let’s have that conversation,” Carney said.

Carney could play an outsized role at November’s summit, especially in view of UK Prime Minister Boris Johnson’s government reshuffle on Thursday, which saw Chancellor of the Exchequer Sajid Javid resign.

Those who lost their job included energy minister Claire O’Neill, who had been named to lead the November talks in Glasgow. Alok Sharma was appointed to the position as her replacement.

Efforts by businesses, investors and financial institutions to disclose climate risk are gathering pace.

BlackRock, the world’s largest money manager with nearly $7 trillion in assets under management, said this month that it would take a tougher view of companies that were not properly disclosing their climate risk.

This week, BP set out one of the oil sector’s most ambitious targets for curbing carbon emissions, saying it would reduce its greenhouse gas emissions to net zero by 2050. The fossil fuel giant plans to give more details about the plan later this year.

“Last week, very few people would have said BP was Paris-aligned,” said Carney, referring to the 2015 global climate agreement, signed in the French capital. “They’ve jumped from toward back of the queue to the front of the queue.”

S&P downgrades trio of Dubai developers as pandemic hits property and retail

Updated 2 min 54 sec ago

S&P downgrades trio of Dubai developers as pandemic hits property and retail

  • Gulf states are being hit hard by the coronavirus pandemic that has come at a time of weak oil prices

RIYADH: The credit ratings of three Dubai property companies were downgraded by S&P as the coronavirus pandemic hits confidence in the retail and real estate sectors.
S&P Global Ratings reduced the credit ratings for the real estate developer Emaar Properties as well as Emaar Malls to +BB from -BBB with a negative forward outlook, adding that it sees a “weakening across all its business segments” in 2020. S&P also cut its rating for DIFC Investments to +BB from -BBB, while keeping a stable outlook.
Gulf states are being hit hard by the coronavirus pandemic that has come at a time of weak oil prices, heaping pressure on governments, companies and employees.
The ratings agency expects the emirate’s economy to shrink by 11 percent this year
“The supply-demand imbalance in the realty sector appears to have been exacerbated by the pandemic. We now expect to see international demand for Dubai’s property to be subdued, and the fall in residential prices to be steeper than we had expected, lingering well into 2021” S&P reported.
Despite easing restrictions and the opening of the economy, S&P said that overall macroeconomic conditions remained challenging.
Global travel restrictions and social distancing constraints “significantly weigh on Dubai’s tourism and hospitality sectors” the rating agency reported.
Still, Dubai’s tourism chief was upbeat on the emirate’s prospects when international tourism resumes.
“Once we do get to the other side, as we start to talk about next year and later on, we see very much a quick uptick. Because once things normalize, people will go back to travel again,” Helal Al-Marri, director general of Dubai’s Department of Tourism and Commerce Marketing told AFP in an interview.