"Climate and Nature Finance Leaders Call for Reforms"

Ten years ago, Bank of England Governor Mark Carney, warned of the “Tragedy of the Horizon" —the systemic financial risks posed by climate change. A decade later, while climate risk management and supervision have evolved, the tragedy is deepening. Financing continues to fuel climate change and also contributes to nature loss in critical ecosystems, threatening ecosystem collapse and the stability of the global economy. Nature loss is a major financial risk that must be addressed alongside climate change. Today, we join 54 leading climate & nature finance institutions worldwide, calling for bold, meaningful financial reforms to safeguard global financial stability and avoid the risk of future systemic collapse. 🔗 Read the full statement: https://lnkd.in/dEYGcNv8 #climatefinance #ecosystemtippingpoints #naturepositive #climatechange #centralbanks #financialsupervision #wwfgreeningfinance

Today, our Founding Director Thom Wetzer joined a panel to discuss the changes to the financial system's response to climate change in the ten years since Mark Carney's agenda-setting "Tragedy of the Horizon" speech. Referring to data from the Oxford Climate Policy Hub's Climate Policy Monitor, he emphasised that implementation of disclosure regulation remains patchy and filled with lacunas, and that it is now time to prioritise substantive regulation across the real economy so that financial systems can amplify real-economy decarbonisation trends.

A decade ago, then-Governor of the Bank of England, Mark Carney, delivered his landmark "Tragedy of the Horizon" speech, highlighting the systemic financial risks posed by climate change.   Today, we join 54 leading climate & nature finance institutions from across the EU, Australia, Canada, the UK, the USA, Asia, and South America in urging central banks and prudential supervisors to reflect on the lessons of the past decade. While climate risk management and supervision have evolved globally, the EU must reflect on its own progress. As we mark this anniversary, the tragedy remains unresolved and is, in fact, deepening. 📉 Financing that fuels climate change has continued, accelerating #natureloss in critical ecosystems and raising the risk of ecosystem collapse and systemic threats to the European and global economy. 🌍 🚨 Nature loss is a major financial risk and must be addressed alongside climate change within the EU’s sustainable finance agenda. Yet, around 90% of EU banks are misaligned with Paris goals, and between 2021 and 2023, top European banks provided $200 billion to fossil fuel expansion. The compounding effects of climate-driven hazards could shrink the euro area GDP by up to 4.7% by 2030.  Central banks and EU regulators must act now: strengthen oversight of climate and nature risks, require Paris-aligned transition plans and disclosures, apply precautionary prudential tools, and align monetary policy with Paris goals.   We are calling for bold, meaningful financial reforms to safeguard global financial stability and avoid the risk of future systemic collapse.   🔗 Read the full statement: https://lnkd.in/gpXQGERW 🔗 Join our webinar on 29 September at 17.00h CET: https://lnkd.in/eWQezDAd   #climatefinance #ecosystemtippingpoints #naturepositive #climatechange #centralbanks #financialsupervision #wwfgreeningfinance

🌍📉 Ten years ago, former Bank of England Governor Mark Carney warned of the “Tragedy of the Horizon”, the failure of markets and policymakers to take climate risk seriously because it lies beyond their immediate timeframes.     A decade on, those risks have only grown. Yet too often, financial institutions and regulators are still falling short.     That’s why today, we have:      ✅ Joined more than 50 organisations worldwide in a global statement calling for urgent action from #financial actors to step up and prevent the financial sector from deepening the #climatecrisis     ✅ Co-signed a UK civil society briefing alongside 10 other leading organisations, urging MPs to press the UK government and the Bank of England to support the green transition and safeguard financial stability.     ✅Published a new blog linking Carney’s warning to today’s EU #deregulatory agenda, showing why long-term competitiveness depends on stronger, not weaker, rules.    ️Climate change is not a distant risk. It is a present reality, and policymakers must act decisively if they are to ensure the financial sector is aligned with climate and social goals.    📖 Read the global statement here: https://lnkd.in/gpXQGERW     📖 Read the UK briefing here: bit.ly/4gBdOwI    📖Read our new blog: https://lnkd.in/ecrh-DDZ  

🔊 A decade ago, then Governor of the Bank of England, Mark Carney, delivered his landmark "Tragedy of the Horizon" speech - highlighting the systemic financial risks posed by climate change. 🌄 Today, to mark its 10th anniversary, we are joining 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 to reflect on the lessons of the past decade. We are calling for bold, meaningful financial reforms to safeguard global financial stability and avoid the risk of future systemic collapse. 🔗 Read the full statement:  https://lnkd.in/gpXQGERW

Mark Carney’s famous speech 10 years ago was the start of discussions, oppositions, committees, conferences, policy and rule making in order ensure that the financial industry contributes to climate mitigation and a sustainable future. Today, policy makers are listening to the corporate lobby to reverse some of the few achievements of the last decade. ! However, 51% of individual investors want their money to have a real-world positive impact according to Sustainable Finance Observatory. But impact-oriented financial products are only a very tiny fraction of their options to invest. :-( Moreover, there are still a lot of misleading claims of so-called green, ESG or sustainable investments. The rules, voluntary standards and legal obligations are not clear and impactful enough. !? Problems with greenwashing and investments that have no positive impact include: - ‘green bonds’ to finance renewable energy issued by companies that still operate and expand fossil fuels, or are in a very slow transition - Financing of unproven technologies and practices such as geo-engineering and carbon offsets/credit - Portfolio decarbonisation rather than real-world emission reductions - Focus on climate or ESG “risks” which only means avoiding reduced financial value due to climate change/ESG factors - Holding shares bought on the stock market (i.e. do not finance companies), rather than shares directly issued by a company for financing a social, climate or environmentally beneficial activities - Holding shares and bonds from companies that seem to be Paris aligned but are actually subsidiaries of fossil fuel companies - Fund managers of sustainable funds are voting or engaging against ESG related resolutions at the AGMs of the companies whose shares they are holding What to do? If individual investors and institutional investors want to have a positive impact, the following would help to avoid greenwashing. Most of these requirements are still not implemented or even considered: ==> 100% financing of projects/activities/companies that directly: - Cut emissions that contribute to climate change (CO2, methane, ...) - Facilitate the energy transition e.g. energy efficiency improvements, renewable energy (not for large data centres), affordable green housing, circular economy innovations, etc. - Adapt infrastructure for sustainable transport, public services, etc. - Improve climate related health issues -Support fair transition for workers and their skills - Finance activities that are aligned with the EU Taxonomy (excl. gas and nuclear energy activities). - Any investment product which claims sustainble objectives, should have clear reporting obligations how the funding actually meets the objectives, and if not, supervisors should be able to sanction. = If we want to break the “tragedy of the horizon”, the long term horizon requires investing in urgent and impactful actions today for a resilient society in the future.

A decade ago, then-Governor of the Bank of England, Mark Carney, delivered his landmark "Tragedy of the Horizon" speech—highlighting the systemic financial risks posed by climate change. Today, to mark its 10th anniversary, our organisation joins 54 leading climate finance institutions from across Australia, Canada, the UK, US, EU, Asia, and South America in urging central banks and prudential supervisors to reflect on the lessons of the past decade. We are calling for bold, meaningful financial reforms to safeguard global financial stability and avoid the risk of future systemic collapse. Read the full statement:  https://lnkd.in/gpXQGERW

"Ten years ago today, Mark Carney, the then governor of the Bank of England, stood before Lloyd’s of London to deliver his “tragedy of the horizons” speech. He warned that climate change was not some distant environmental concern but a threat to financial stability. ... But financial flows still fail to reflect the risk posed by climate change. Fossil fuel financing by the world’s largest banks reached nearly $869bn in 2024, surpassing previous years, and much of it for fossil fuel expansion. And each year of new lending adds to the pile of exposures already sitting on balance sheets," write Julia Symon head of research and advocacy and Max Kretschmer at Finance Watch. Full piece in the comments.

Since his election Donald Trump has taken a deregulatory approach and moved away from the green policies of the previous administration. But Kevin Stiroh, former chair of the US Federal Reserve Board’s supervision climate committee, told Green Central Banking’s Moriah Costa that central banks are within their mandate to consider physical and transition risks from climate change and the impact on bank losses. Stiroh, who recently joined economic thinktank Resources for the Future as a senior fellow, has co-authored a report with Michael Holscher, CFA and David Ignell, CFA from the Federal Reserve Bank of New York and Federal Reserve Board manager Morgan Lewis. The paper presents a framework to help supervisors understand how to think about climate change and its potential effects on the real economy, and how they might respond through regulatory capital requirements. Stiroh and his co-authors contend that climate change could impact the reserve capital needs of financial institutions. Read the full interview here: https://greencb.co/3KRHI43 #CentralBank #GreenTransition #ClimateRisk

Too Much Focus on Language (not Enough of the Mechanics of a Transition) - Ten (10) years ago, Prime Minister Mark Carney then Bank of England governor Mark Carney framed climate change for the first time as an existential threat to the financial system. Ten years on, as experts reflect on the impact his speech had, and what’s changed since, some say his stark warning “woke up” financial institutions to the risks of climate change and fired the “starting gun” in helping central banks and financial supervisors better understand the associated financial risks. “As prime minister of Canada, Mark Carney has a rapidly closing window to demonstrate that he hasn’t forgotten his own words,” Adam Scott, executive director of Shift: Action for Pension Wealth & Planet Health, said in a statement. “He must take urgent action to regulate [Canada’s] financial sector to align with climate stability, before it’s too late.” https://lnkd.in/e7V6Y3FK #canada #climateagenda #climatechange