The governor of the Bank of England has described the fight against climate change as the “greatest commercial opportunity of our time”, as he launched a bid to unlock private finance for the cause.
The outgoing governor, who has been appointed as Prime Minister Boris Johnson’s finance adviser for this year’s COP26 climate change conference in Glasgow, said all banks, insurers and investors need to adjust.
Speaking to business leaders at the Guildhall in London, Mr Carney said private finance has a “critical role” in the transition to carbon neutral economies.
He said: “Today is all about action, the actions that the private sector can take to support a whole economy transition, the actions that regulators, governments and countries can take that will catalyse and amplify your actions, the actions that people are demanding and that future generations deserve.”
Banks and other investors are already demanding more disclosures from the firms they invest in on the financial risks related to climate change.
It saw oil giant BP commit to becoming emissions neutral by the middle of the century earlier this month, a target which echoes the Government’s plan to reach net zero by 2050.
Mr Carney said: “The UK has been at the forefront of innovation for centuries… it was the birthplace of the industrial revolution, something that brought unimagined progress, and the City financed it.”
Mr Carney called on investors in the room to “help create the path to a sustainable world”.
He added: “Now, on the cusp of the sustainable revolution. The world once again needs your innovation, your resources and your leadership.
“Doing so could turn an existential risk… into the greatest commercial opportunity of our time.”
The UK and Italy are co-hosting COP26 later this year as governments come together to plot a path to reaching the global climate targets set in Paris in 2016.
Britain and 120 other countries have already set targets to reach net zero, that is being emissions neutral.
European Central Bank chief Christine Lagarde also warned at the event in London that “certain economic activities may very quickly be rendered obsolete”, saying there is a risk assets could become “stranded”.
Europe is assessing how these risks are measured and reported, Ms Lagarde told the business leaders.
She promised the first “stress test” to see how 90 significant institutions across the euro area are prepared for climate-related risks.
The first results are due by end of this year.
She said the finance system will be “pivotal” for efforts to cut emissions as the EU could need hundreds of billions of euros each year in its battle.