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
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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.”


Saudi minister: OPEC+ will take responsible approach to virus

Updated 26 February 2020

Saudi minister: OPEC+ will take responsible approach to virus

  • Saudi Arabia supports the further oil production cut, but Russia is yet to announce its final position on the matter

RIYADH: Saudi Arabia’s energy minister said on Tuesday he was confident that OPEC and its partner oil-producing nations, the so-called OPEC+ group, would respond responsibly to the spread of the coronavirus.

He also said Saudi Arabia and Russia would continue to engage regarding oil policy.

“Everything serious requires being attended to,” the minister, Prince Abdul Aziz bin Salman, told reporters at an industry conference in Riyadh.

An OPEC+ committee this month recommended the group deepen its output cuts by an additional 600,000 barrels per day.

Saudi Arabia supports the further oil production cut, but Russia is yet to announce its final position on the matter.

The minister said he was still talking with Moscow and that he was confident of Riyadh’s partnership with the rest of the OPEC+ group.

“We did not run out of ideas, we have not closed our phones. There is always a good way of communicating through conference calls,” he said.

Regarding the coronavirus, which has impacted OPEC member Iran, he said OPEC+ members should not be complacent about the virus but added he was confident every OPEC+ member was a responsible and responsive producer.

The flu-like SARS-CoV-2 virus, which first broke out in China, has now spread to more than 20 countries.

“Of course there is an impact and we are assessing, but we’ll do whatever we can in our next meeting and we’ll address that issue,” UAE Energy Minister Suhail Al-Mazrouei said at the same industry conference.

Saudi Aramco CEO Amin Nasser on Monday said he expected a short-lived impact on oil demand.

“We think this is short term and I am confident that in the second half of the year there is going to be an improvement on the demand side, especially from China,” he said.

Oil climbed on Tuesday as investors sought bargains after crude benchmarks slumped almost 4 percent in the previous session, although concerns about the global spread of the virus capped gains.