Reiterating his warning that the vast majority of oil reserves should be considered “unburnable”, Bank of England governor Mark Carney has called for climate change risk to be mainstreamed.
Joining a host of other financial experts highlighting that continued fossil fuel investment poses a serious financial risk in a carbon-constrained world, Carney told an audience at the World Bank that “the vast majority of reserves are unburnable” if the world is to avoid the worst impacts of climate change.
He also urged companies and public institutions to factor climate risk into their annual reporting.
Carney is among a growing number of high-profile figures including those at the helm of the International Energy Agency, the World Bank and the International Monetary Fund calling for fossil fuels to be left in the ground and climate change risk to be mainstreamed
Continued investment in dirty energy is a risky choice, both for the planet and profits.
It is widely accepted that a finite amount of greenhouse gas emissions can be emitted to stay below the internationally agreed threshold of 2C of warming.
Yet companies continue to invest billions of dollars a year in searching for new, more risky fossil fuels.
These projects will never see a return in a carbon-constrained world, as action kicks in to prevent the most dangerous impacts of climate change, and companies will be left facing a devaluation of their assets and massive market losses.
The transition from fossil fuels to a cleaner energy future is already underway, and those failing to acknowledge it will find themselves left out in the cold.
The governor of the Bank of England, heads of state of some of the most polluting nations and citizens around the world world are waking up to the threat of the climate change and the huge opportunity of the clean energy transition.
As governments work towards a new global climate treaty in Paris 2015 – aimed at keeping the global temperature rise below 2C – those companies failing to keep up with the growing pace of this transition will find their public image threatened and their profits declining.