Hamish Stewart: Mark Carney to Canadian bankers: get it together on climate

Wow, Mark Carney telling Canadians we have a lack of leadership in the financial industry, the energy sector, banks, pension fund leaders, and citizens because they are not looking at the long-term risks linked to climate change. If this doesn’t set off alarm bells in Canada then I’m not sure what will. Click here to read the full article or an excerpt below.

 

Carney will speak to Canada’s finance professionals about the ways in which climate change could affect financial stability. His address in Toronto will echo a speech given last year at the Bank of England in which he described three major climate risk categories: physical risks, liability risks and transition risks. Physical risks include those from increased incidence and severity of floods, wildfires and storms. Liability risks arise if those suffering climate change-related losses, including shareholders, pensioners, and others, seek compensation from those considered to be responsible – including company directors and pension trustees. Transition risks are caused by the downward revaluation of assets during an adjustment to the lower-carbon economy and the phase out of fossil fuels (think US coal industry).

Carney described the failings of short-term thinking in the financial system and the need to manage long-term risks linked to climate change as a “tragedy of the horizon.” Global rating agency Moody’sand the FSB Task Force on Climate-related Financial Disclosures have both expanded the analysis since Carney’s speech.

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