Carney: Financial system central to net zero

Former Bank of England Governor Mark Carney has emphasised the financial sector's crucial role in the transition to a low carbon and eventually a net zero economy.

In the closing keynote of Sibos 2021, Carney also injected a note of cautious optimism on the question of how quickly progress can be made in reducing carbon emissions.

In a wide-ranging Q&A, Carney, now head of transition investing at Brookfield Asset Management and a vociferous campaigner for progress in tackling climate change, outlined progress made in recent years in bringing the climate change agenda into the mainstream of financial and business discourse.

He highlighted the speed at which businesses all over the world were signing up voluntarily to carbon disclosure standards and seeking to adopt tougher environmental, social and governance (ESG) operational and investment strategies – if they were not already being forced to do so by increased pressure from regulators and investors.

He suggested progress was being made in encouraging slower-moving governments and sovereign wealth funds to accelerate action on climate change.

But he stressed the need for urgent action, saying “We’ve certainly left it late.”

He urged governments and businesses to grasp the opportunity to take action, as by doing so they would also help the world economy to build a genuinely sustainable recovery from the effects of the COVID-19 pandemic.

He warned that those that failed to do so would inevitably face greater transition risks as a result.

“The good news is that the core of the financial system is ready,” said Carney. He also highlighted the fact that the International Accounting Standards Board (IASB) will release new accounting standards linked to carbon emission disclosures in the middle of 2022.

“The reason they can do that is they can build on the work that’s already been done by the financial sector,” he said. “The financial system is being changed, so that every decision can take climate change into account. Countries making decisions and companies making investment decisions can count on finance.”

Carney also suggested that it might be necessary to tie senior management pay to progress against ESG/carbon emission reduction targets. “As with anything that’s strategic for the company, it makes sense to have robust board oversight and to tie management compensation to the milestones on that path,” he said.

    Share Story:

Recent Stories


The Future of Intelligent Finance
FStech Group Editor Mark Evans sits down with Jason Cao, President of Global Financial Services Business Unit, Enterprise BG at Huawei ahead of its Intelligent Finance Summit which was held on 3rd and 4th of June in Shanghai. This Q&A delves into key trends in digital transformation of the financial services industry as well as a look at how data, robotic infrastructure, intelligent storage and innovative technologies are shaping the future for FSIs.

The Rise of Instant Payments
Instant payments are creating new business opportunities for banks by providing more touchpoints than ever. With these evolutions underway, Featurespace brought leading industry experts together to discuss how they are protecting customers from fraudsters in real time, utilizing innovative and disruptive solutions to reduce fraud. Click here to find out more.

Offloading Cyber Risk in the Cloud
As cyber attacks and data breaches are in the news on an increasingly regular basis - with regulatory penalties and customer trust on the line for financial services firms - it has never been more crucial to be compliant in the cloud.

This video, with Akamai’s EMEA director of security technology and strategy Richard Meeus, will help explain what your company can be doing to make sure it’s not embroiled in the next big fine or front-page scandal.