Climate-related challenges are mounting while the time to act on them is shrinking, the Prince of Wales and Bank of England governor Mark Carney warned an audience at a summit of one of the prince’s charity.
Talking at his Accounting for Sustainability (A4S) project’s summit, attended by Insurance Asset Risk, Prince Charles warned financial industry leaders that if they hadn’t committed yet to a sustainable future, he wasn’t ready to stop trying convincing them.
“We are not finished with you yet,” he said.
Having recently celebrated its 70th birthday the Prince said it was a good opportunity to look at the journey achieved. And drawing on recent travels, he reiterated the importance of making sustainability finance mainstream for future generations.
For decades he had been warning financial leaders about the matter, he said. “At long last people are now paying attention, but at a point where [the challenges are starting to become] insurmountable.”
He reminded the audience of the progress made, through the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and the United Nations Sustainable Development Goals (SDGs) as well as his own charity, A4S.
“All is not lost, but this is the last call, I’m telling you,” he said.
Carney pointed out that had the finance industry payed attention when the Prince first started talking about the issue, by now “we would have solved the tragedy on the horizon”.
This of course was a reference to his 2015 speech at Lloyd’s, which many see as a turning point in making sustainability mainstream finance.
He echoed the Prince’s remarks pointing at the alarming findings in the latest UN Intergovernmental Panel on Climate Change report and the commitment reached at the Paris Agreement.
Last year marked a record in weather-related losses for the insurance industry, Carney said, and 2018 is on track to beat it.
“Insurers are at the front line,” he said. “They have responded with complicated models and adapted pricing.”
He alluded that insurers and banks had learned the lessons and praised the Prudential Regulation Authority’s publication of draft guidance on managing financial risks from climate change.
However when asked in the Q&A session by A4S executive chairman Jessica Fries if the TCFD recommendations should become mandatory, Carney replied: “It’s not my call, but my view is it would be premature at this stage.”
He argued it was important to learn by doing, and there was still things to be trialled and improve such as scenario analysis.
“The private sector will drive the transition to a low carbon economy,” he said in his speech, stressing that we had reached a stage where work needed to be done on the usefulness of companies’ disclosures.
Looking at “what is disclosed and what actually gets used. There is no point in disclosing what will not be used.”