Posted on: 20/12/2016
Bank of England Governor Mark Carney and businessman Michael Bloomberg have called for companies to declare their exposure to climate change risks.
Writing in The Guardian newspaper, the pair said the fight against global warming will be put in jeopardy unless companies with large carbon footprints “come clean”.
They say a new set of guidelines that have been drawn up over the past year must be implemented.
Disclosure will then allow investors to finance the companies that have the best ideas for hitting the target of keeping the rise in global temperature to less than 2C.
Bloomberg has been leading a climate-related financial disclosure taskforce set up in December 2015 by the Financial Stability Board, a body born out of the G20 following the 2008-9 banking crisis.
Carney and Bloomberg said: “The challenge is that investors currently don’t have the information to respond to these developments.
“This must change if financial markets are going to do what they do best: allocate capital to manage risks and seize new opportunities.
“Without the necessary information, market adjustments to climate change will be incomplete, late and potentially destabilising.”
They added: “A properly functioning market will price in the risks associated with climate change and reward firms that mitigate them.
“As its impact becomes more commonplace and public policy responses more active, climate change has become a material risk that isn’t properly disclosed.”
Companies represented on Bloomberg’s taskforce include banking giant Barclays, miner BHP Billiton, chemical company Dow and steel maker Tata.
> Read Carney and Bloomberg's article