Outbound Governor of the Bank of England Mark Carney has issued a warning that valuable assets will be rendered worthless if businesses do not take an active role in combating the current climate crisis.
Speaking to BBC Radio 4 Today, on a program guest-edited by Greta Thurnberg, Mr Carney revealed that while the financial sector has already started cutting back on investments in fossil fuels, a greater effort is needed to preserve the earth, and by extension, the economy.
Speaking to presenter Mishal Husain, Mr Carney stressed the importance of all companies, financial institutions, asset managers, funders and insurers having a solid plan: “Four to five years ago, only leading institutions had begun to think about these issues and could report on them,” he says.
Mr Carney continues: “Now $120tn worth of balance sheets of banks and asset managers are wanting this disclosure [of investments in fossil fuels]. But it’s not moving fast enough.”
While he concedes that capitalism plays a vital role in raising funds for clean technologies, he also stresses the importance of government-imposed incentives, rules and prohibitions to direct businesses accordingly.
As Governor of the Bank of England, Mr Carney has helped launch a stress test to indicate which industries would be worst hit by climate change. With the studies concluded, focus has now shifted on how the financial industry can change its course to combat the increasingly risky situation. Measures have already been taken into effect and he reveals that the Bank will not invest in new thermal coal mines and will soon be offering clients the option to purchase weather-related catastrophe bonds.
Now nearing the end of his tenure as Bank of England chief, Mr Carney will shortly be moving into his new role as the United Nation’s special envoy for climate action and finance where his responsibilities will focus on making climate change a key priority in private financial decision making.