Speech given by Mark Carney, Governor of the Bank of England, Tokyo, TCFD Summit 2019 08 October 2019

The Governor says the financial sector must help the transition to net zero. And he suggests how the Task Force on Climate-related Financial Disclosures (TCFD) can help it do that. https://t.co/zkfJf6DuKZ pic.twitter.com/bGF4k47zMu

— Bank of England (@bankofengland) October 8, 2019

Introduction

It is an honour to join this inaugural TCFD Summit.

There could be no better host than Japan.

Prime Minister Abe made climate change an important theme of the Japanese G20 presidency, calling on nations to put ‘promises into practice’. And Environment Minister Koizumi recently said Japan is “committed to realising a decarbonised society.” Japanese companies are heeding these calls.

In the past year, almost 200 Japanese firms have joined the TCFD, bringing Japan to the top of the TCFD league table. This welcome progress, and that of the TCFD more generally, must be set against growing challenges.

Over the past five years, global carbon emissions have risen by 20% and sea levels by over 3.3mm per year. Global temperatures are on course to increase by 3.4°C by 2100.

The physical impact of these changes will not be evenly distributed. With ferocious typhoons, record breaking heatwaves and major landslides, Japan is already at the sharp end of a new pattern of devastating extreme weather events.

The transition to a low carbon economy will also bring its own risks and opportunities. Changes in climate policies, new technologies and growing physical risks will prompt reassessments of the values of virtually every financial asset.

Firms that align their business models to the transition to a net zero world will be rewarded handsomely. Those that fail to adapt will cease to exist. The longer that meaningful adjustment is delayed, the greater the disruption will be.

Like virtually everything else in the response to climate change, the development of a more sustainable financial system is not moving fast enough for the world to reach net zero.

To bring climate risks and resilience into the heart of financial decision making, climate disclosure must become comprehensive climate risk management must be transformed, and investing for a two degree world must go mainstream.

Today, I want to focus on how the TCFD can help achieve these goals.

The rest of the speech can be read here

Source: Bank of England