By Alessandra Galloni
LONDON (Reuters) - Bank of England Governor Mark Carney called on the world's businesses to publish strategies for cutting carbon emissions and adopting cleaner power sources by November, when world leaders meet in Scotland for U.N.-led climate talks.
"It's not just green assets and divestment campaigns or certain things are so brown or black. Every company ultimately has to have a plan for a transition and what the opportunities are and where the risks are," Carney said in an interview.
"For Glasgow that must be well on the path. That that is the norm. That the question doesn’t even have to be asked because companies are answering that question as part of their strategy.
"And the answer is, it’s the transition, stupid," he said, referencing a phrase coined by former U.S. President Bill Clinton’s election strategist in reference to the U.S. economy.
Carney was speaking to Reuters a month before he leaves his nearly seven-year posting at the helm of Britain's central bank to take a new role as the United Nations' envoy for climate.
The Canadian banker, who disarmed the British insurance industry in 2015 when, in a speech called "Tragedy of the Horizon," he warned of their exposure to climate-related events, has been one of the most vocal public figures to push for better supervision and disclosure of climate risk.
The Task Force on Climate-related Financial Disclosures (TCFD), which he launched in 2015, has become a global standard that more than 1,000 companies, financial firms, governments and other organizations have adhered to.
The intentions behind it also chime with a shift of emphasis by another leading central banker, European Central Bank President Christine Lagarde.
In her second rate-setting meeting since succeeding Mario Draghi, Lagarde last month launched a broad policy review that plans to incorporate the economic impact of climate change into its monetary framework for the first time.
For the time being, the TCFD remains voluntary, and it can be hard to compare and verify the claims of disclosures.
So hammering out a common set of global reference points on climate-related disclosures is seen by many as a crucial step to helping investors allocate capital more effectively.
MANAGING THE RISKS
Money would flow to those companies managing the risks - and therefore likely to perform better in the transition to a low-carbon economy - and away from those in danger of being impacted more severely.
Carney said November's COP26 climate talks would also be a good deadline for regulators to map out how to make the TCFD framework compulsory.