Green investing according to Carney

Written by Rebecca O'Connor on 6th October 2016

Back when the prospect of Brexit looked likely to tip us into Economic Apocalpyse, V.2016, we wrote this blog in praise of Mark Carney.

Now, at risk of just turning this website into a Mark Carney fan club, herewith another blog highlighting why he deserves extra special praise: he has said more about climate change and financial markets to rooms full of sceptical money men in the City than any person to date. True fact.

He made this speech in Berlin on September 22 for the Arthur Burns Memorial Lecture, and we are grateful to the Climate Bonds Initiative for sharing the link to the speech.

Don’t have time for the full thing? Here are the top quotes:

  • “Climate change is a tragedy of the horizon which imposes a cost on future generations that the current one has no direct incentive to fix.”
  • “Too rapid a movement towards a low-carbon economy could materially damage financial stability”
  • “In time, growing swathes of our economies could become uninsurable absent public backstops – hardly the prescription for a growing business”
  • “Changes in policy, technology and physical risks could prompt a reassessment of the value of a large range of assets as costs and opportunities become apparent.”
  • “Both business and investors appear to be hedging future disaster risk”
  • “Clear policy frameworks that encourage sustained private investment are thus essential, including those that mobilise private investment to finance the transition to the low-carbon economy.”
  • “Green finance is a major opportunity”
  • “The combined market capitalisation of the top four US coal producers has fallen by over 99% since the end of 2010, and three have recently filed for bankruptcy”
  • “The more we invest with foresight; the less we will regret in hindsight.”
  • “Static disclosures of current carbon footprints are not sufficient to reveal a company’s climate-related financial risks.”
  • “For investors to price financial risks and opportunities correctly, they need to weigh firms’ strategies against plausible public policy developments, technological advances, and evolving physical risks”
  • “One proposal is international collaboration to facilitate cross-border investment in green bonds. The development of this new global asset class is an opportunity to advance a low carbon future while raising global investment and spurring growth.”
  • “With better information as a foundation, we can build a virtuous circle of better understanding of tomorrow’s risks, better pricing for investors, better decisions by policymakers, and a smoother transition to a lower-carbon economy.”