Global Canopy joins international campaigns demanding action from central banks to tackle the combined climate and nature crisis

Ten years on from Mark Carney’s landmark “Tragedy of the Horizon” speech Global Canopy joins over 60 international climate finance organisations demanding action from central banks.

A decade ago, then Governor of the Bank of England, Mark Carney, delivered a speech which detailed the existential threat climate change poses to the financial system. He talked of a failure of financial institutions to bring climate risk into decision-making. But 10 years on from this warning we remain trapped in inaction.

That’s why Global Canopy has collaborated with over 60 climate finance organisations in two campaigns, marking the anniversary of the speech and calling for regulatory action.

Focusing on the Bank of England

The first statement – signed by 11 leading civil society organisations – states that “the Bank of England’s current policies are undermining climate action and green growth.” It continues “allowing the financial system to fuel climate change and nature loss will increase … economic threats. In doing so, the Bank is also failing in its secondary objective to support the economic policies of the government, which explicitly include sustainable economic growth and net zero.”

 “In the decade since Mark Carney’s speech, there’s been an abundance of evidence of the financial materiality of nature loss to the economy. The Bank of England must now act on climate change and nature loss as an entwined threat to financial stability”

Dr Natacha Postel-Vinay, Technical Nature-Related Finance Lead, Global Canopy

The briefing outlines four key areas in which the Bank of England must act now to support the UK’s green growth objectives:

1. Align the Bank of England’s collateral rules with the green transition

2. Adapt the Bank’s targeted lending schemes to support green investment

3. Regulate for environmental risks

4. Coordinate for green investment and inflation preparedness.

Read the briefing here

Demanding Global Action

We’ve also joined forces with 54 leading climate finance institutions from across Asia, Australia, Canada, EU, South America, the UK and the US in urging central banks and prudential supervisors across the world to reflect on the lessons of the past decade.

The statement, which was handed to Basel Committee for Banking Stability, was a call for global financial reform saying “the financial system has not merely failed to mitigate climate risk – it is actively fueling it.”

Tragedy of the Horizon Statement being handed to Joanne Mardsen from the Basel Committee for Banking Stability and Conor Donaldson from the International Association of Insurance Supervisors.

The statement’s demands include:

• Clear and binding expectations for how financial institutions must identify, assess, and mitigate climate-related risks across their activities.

• Mandatory adoption and implementation of Paris-aligned climate-related transition plans.

• Mandatory disclosures that drive change from institutions by providing meaningful data on how much they contribute to the energy transition, greenhouse gas emissions, and nature degradation via financing and facilitation.

• Central banks should align monetary policy operations with Paris goals to promote the development of a sustainable economy and support price and financial stability.
  

Read the statement here

In his speech ten years ago Mark Carney warned the finance sector of what was to come. To date that warning has not led to decisive action. That’s why regulators and central banks need to step in.