Firms are slow to fight climate change and that could result in irreversible damage, including to their own business, warns Bank of England (BoE) Governor Mark Carney, the incoming UN Special Envoy for Climate Action and Finance.
The question for every company, financial institution, assets manager, pension fund manager or insurer is: ‘What is your plan?’ Carney said in an interview aired on Monday by BBC4 radio.
Carney, who leaves his current post in March, was speaking during a special morning news programme dedicated to climate issues and for which young Swedish environmental activist Greta Thunberg was the day’s guest editor.
He warned that the climate crisis was an impending “tragedy” with more and more extreme meteorological events, and that it would soon be too late to act.
For the BoE chief, the financial sector has to begin, for example, by limiting its investment in fossil fuels, such as charcoal, but that is not happening fast enough, he said.
“The concern is whether we will spend yet another decade doing worthy things but not enough (…) and we will blow through the 1.5°C mark very quickly,” Carney said, referring to the target set by the Paris Agreement with regard to limiting global warming as measured against the pre-industrial era.
Finally, he warned businesses that their assets could become worthless if they persisted in investing in polluting energies that will eventually be abandoned, not to mention the impact climate disasters will have on the economy.
Also interviewed on BBC4, the head of new energies and gas at Royal Dutch Shell, Maarten Wetselaar, said he recognised “the need for urgent action on climate change.” There needs to be a transition, so that fossil fuels can gradually be replaced by low-carbon energy sources, he noted.
Mark Carney, chosen by the United Nations to replace billionaire Michael Bloomberg as its special envoy on climate, has continually alerted the business world to the risks linked to the climate emergency.
At the recent COP25 in Madrid, he advocated making it mandatory to assess and publish the climate risks for firms, and it is under his leadership that the BoE launched a pioneering project of resistance tests aimed at assessing, by 2021, the risks global warming poses for the financial system.