U.K.’s Top Banker: Fossil Fuel Investments Could Become “Worthless”

The outgoing governor of the Bank of England, Mark Carney, has warned that big investment funds could be left high and dry if they do not change course to account for climate change.

In an interview on the BBC, Carney called on companies to do more to disclose the climate impact of their investments.

“A question for every company, every financial institution is: what’s your plan? We now have $120 trillion of balance sheets of banks and asset managers wanting this type of disclosure … but it’s not moving fast enough.”

Canada-born Carney was speaking to BBC Radio 4’s influential Today program, guest edited on Monday by Swedish climate activist Greta Thunberg.

Carney stopped short of demanding that companies and pension funds should divest from fossil fuels, but warned that “a substantial proportion of those assets are going to be worthless.”

In his remarks, Carney noted: “If you add up all the [pension] plans of all the companies out there, they’re consistent with degree warming of something on the order of 3.7, 3.8 degrees [Celsius]⁠—far above that 1.5 degrees that governments say they want and that people are demanding.”

Earlier this month, the Bank of England revealed it would be instituting a new series of stress tests for banks and insurers to establish how well their assets would withstand the risks of climate change.

Carney described the tests, known as the Biennial Exploratory Scenario (BES), as a “pioneering exercise,” saying that “BES will help ensure the core of our financial system is resilient to those changes.”

Carney held roles at Goldman Sachs and as the governor of the Bank of Canada before being selected to head the Bank of England in 2012. It was announced earlier this month that he had been appointed to the UN as a special envoy on climate change and finance after he steps down from the governorship in January.

Elsewhere on the program, 16-year-old Thunberg spoke with 93-year-old broadcaster Sir David Attenborough about shared their commitment to climate change action. Noting the failure this month of the UN’s COP25 conference in Madrid to resolve issues surrounding carbon markets and other standards to push through meaningful action on climate change, Attenborough said that forcing action at the global level required an “electric shock” that Thunberg and other activists were helping to deliver. The generation-spanning pair agreed that the next COP meeting in Glasgow would prove “crucial” in pinning down countries on their commitments to climate action.

But while Attenborough said he did not believe there was a generational divide on the issue of climate change, Thunberg said a divergence in perspectives did exist: “There’s a difference in the way older people and younger people see the climate crisis, because we see that it’s something that will affect us, while older generations see it as something that will affect their children and grandchildren.”

“But there shouldn’t be a divide,” Thunberg said, “as it’s something that affects all of us.”