Businesses must tackle climate change or “fail to exist”, Bank of England governor Mark Carney warned this morning.
The financial sector has to act on climate-related risks, Carney said in a joint article with French central bank governor Francois Villeroy de Galhau and Network for Greening the Financial System (NGFS) chair Frank Elderson in The Guardian.
The warning came as NGFS made a series of recommendations on the role of the financial services industry in achieving a low-carbon economy, saying firms must integrate the monitoring of climate-related financial risks into day-to-day supervisory work.
Central banks should integrate sustainability into their portfolio management, while firms must collaborate to bridge data caps and build in-house capacity to manage climate-related financial risks, the NGFS report said.
“If the financial community acts on these recommendations we will be two big steps closer to ensuring an orderly transition to a low-carbon economy,” the trio wrote in The Guardian.
“We recognise that the challenges we face are unprecedented, urgent and analytically difficult.
“The stakes are undoubtedly high, but the commitment of all actors in the financial system to act on these recommendations will help avoid a climate-driven “Minsky moment” – the term we use to refer to a sudden collapse in asset prices.”
The comments come as climate change activists began their third day of demonstrations in Central London this morning, threatening tube and rail disruption.