Carney urges City of London to step up ahead of climate summit

Outgoing Bank of England Gov. Mark Carney with European Central Bank President Christine Lagarde in London’s Guildhall on Thursday. (AP)
Short Url
Updated 28 February 2020

Carney urges City of London to step up ahead of climate summit

LONDON: Bank of England Gov. Mark Carney has called on London’s money managers to help speed a transition to a low-carbon future, aiming to usher in a new era where every professional financial decision takes climate change into account.

Carney wants to leverage a UN climate summit in November to strengthen a raft of initiatives to spur a major reallocation of capital away from polluting industries in time to prevent global warming toppling industrial society.

“Private finance will have a critical role to play in a successful transition to a net zero (carbon emissions) economy,” Carney told an event at London’s Guildhall, also attended by European Central Bank President Christine Lagarde.

“We should make no mistake about it: Achieving net zero requires a whole economy transition. Every company, every bank, every insurer, every investor will have to adjust business models. But doing so will turn an existential risk ... into the greatest commercial opportunity of our time,” Carney said.

Carney is due to take over as UN special envoy on climate finance next month after stepping down as governor. He has also been appointed to advise British Prime Minister Boris Johnson in the run-up to the Nov. 9-20 climate summit in Glasgow.

The Guildhall event was billed as the launch of a “Private Finance Agenda” component of the summit, consisting of existing initiatives Carney has championed since he began working to push climate change to the forefront of investors’ minds in 2015.

FASTFACT

• Mark Carney is due to take over as UN special envoy on climate finance next month after stepping down as governor.

• He has also been appointed to advise British Prime Minister Boris Johnson in the run-up to the Nov. 9-20 climate summit in Glasgow.

These include moves to encourage companies to be more transparent about the risks they face in a rapidly warming world, stress tests to reveal how banks would fare as temperatures rise, and ways to allow investors to gauge the impact of their portfolios on the climate.

Carney hopes such measures will help the financial industry drive transformational change in energy, agriculture, heating, transport, fashion and other sectors needed to help Britain achieve its goal of net-zero carbon emissions by 2050.

Lagarde, who began an overarching review of the ECB’s policy framework last month, echoed Carney’s calls for banks to be more open about their exposure to climate-related risk, saying disclosures on the issue have “some way to go.”

“The (ECB) is now reviewing the extent to which climate-related risks are understood and priced by the market and is paying close attention to how credit-rating agencies incorporate such risks into their assessments of creditworthiness,” Lagarde said.

“Preparatory work is also under way for a macroprudential stress test to assess climate-related risks, with the first results expected by the end of the year.”

With the Earth on track for temperature increases that some scientists and economists believe could endanger the survival of modern societies, the Glasgow summit is seen as a critical test of the 2015 Paris Agreement to combat climate change.

Newly appointed Business Minister Alok Sharma, who Johnson named as president of the summit this month after sacking a former energy minister from the role, backed Carney’s call for the City, London’s financial center, to step up.

“In Glasgow, the world must ramp up momentum toward a zero carbon economy,” Sharma told the Guildhall event. 

“All countries must commit to significant further cuts to carbon emissions by 2030 and to reach net zero as soon as possible.”


OPEC+ emergency meeting likely to be postponed to April 8 or 9

Updated 20 min 5 sec ago

OPEC+ emergency meeting likely to be postponed to April 8 or 9

  • The postponement allows for more time for negotiations among oil producers

OPEC and its allies will not hold their emergency virtual meeting on Monday and will likely postpone it until April 8 or 9 to allow more time for negotiations among oil producers on crude supply cuts, two OPEC sources said on Saturday.