Carney’s CEO Club Gives $3.3 Trillion Muscle to Climate Fight
Originally posted on www.bloomberg.com.
Bank of England Governor Mark Carney said he’s concerned investors aren’t doing enough to assess threats that global warming will have on assets they purchase.
The central bank governor who also leads the Financial Stability Board advising the Group of 20 nations also won the backing of more than 100 chief executive officers for his campaign to increase financial reporting standards on issues related to the environment. That transparency, he said, would help investors understand how rising temperatures will affect company performance.
"The risk is that people aren’t thinking about this sufficiently, and that there’s a bigger adjustment that comes -- you get a climate Minsky moment where there’s much tougher regimes put in place,” Carney said in an interview on Bloomberg Television on Thursday, noting there’s already upheaval in the strategy of German utilities and stemming from the Volkswagen AG emissions scandal.
The remarks amplify a theme Carney has stressed for years, that the impact of rising temperatures and more unpredictable weather represents a long-term risk for investors more used to assessing investments a few months or at most a few years in advance.
The Group of 20 leading economies asked Carney in 2015, shortly before negotiations for the Paris Agreement on climate change, to compile a study weighing the financial risks implied by global warming. Companies with a combined market value of more than $3.3 trillion -- equivalent to all the goods and services produced annually by Germany -- threw their weight behind Carney’s final report on climate change as it was published on Thursday.
More companies are likely to join the effort “as people become engaged,” Carney said, adding that their support will improve steps toward transparency the FSB is suggesting.
Michael Bloomberg, founder and majority owner of Bloomberg News and its parent company Bloomberg LP, was appointed to lead the 31-member panel, which also includes executives and advisers from a variety of industries around the world.
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