The importance of today’s actions will shape our future

The importance of today’s actions will shape our future

Climate change is one of the tragedies on the horizon – actions today will be less costly than in the future.’

Mark Carney

The topic of climate change is a recurring theme we simply cannot ignore. This was highlighted in the first of a series of lectures given by Mark Carney last week as part of BBC 4’s Reith Lecture series. Mark talked about business morals and market sentiments arguing that society has come to embody Oscar Wilde’s old aphorism: “knowing the price of everything but the value of nothing.” Interestingly the issue of climate change was referenced in this lecture as ‘one of the tragedies on the horizon’ and Carney stressed the importance of ‘actions today will be less costly than in the future.’ Indeed, this is nothing new and a sentiment that Carney has been championing for some time. Back in 2015 in BOE speech he warned that climate change will lead to financial crises and falling living standards unless the world’s leading countries do more to ensure that their companies come clean about their current and future carbon emissions.

It’s time to become more accountable and task this seriously

Why are we still having to hammer home this message? What is being done to tackle the financial implications of the climate change crisis? Simply put, as a society and business community we haven’t done enough in the past to alleviate the threat of climate change. But things are changing. People really do care about our planet and are working together to change the future. From a business viewpoint, the landscape is changing and positive moves are happening – for example banks and financial institutions are being held accountable by the PRA who have laid down strict guidelines making it mandatory for lenders to map out their plans by June 2021. Participants in the 2021 biennial exploratory scenario also need to model their balance sheet exposure using climate projections.

Climate change has also been a recurring theme at this week’s Bloomberg Sustainable Business Summit, a global event where there has been almost continuous calls from bankers, academics and at least one chief executive officer for better corporate disclosures on climate change and the importance of transparency in climate risk disclosure. It is encouraging that these critical conversations about local and global issues in sustainable business and finance are prominent. The team at D-Risk are well positioned to help financial organisations ensure their positions reflects this real shift in accountability because we can deliver expert insight to research data and can deliver first-hand knowledge of the impact of climate related events on property and business opportunities.

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