UK financial firms are at the “front of the peloton” on climate standards and the rest of the world will follow suit, the former Bank of England governor Mark Carney said today.
Carney, now UN Special Envoy on Climate Action and Finance, said that British regulators had set the most ambitious targets on net zero by subjecting firms to mandatory climate reporting requirements in line with the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations, introduced at Cop 26 last year.
The requirements came as part of then-Chancellor Rishi Sunak’s plans to make the UK the world’s first ‘Net Zero Aligned Financial Centre’ and are being rolled out more widely this year, after being introduced to the biggest firms in January.
Speaking to MPs today at a committee hearing, Carney said that rather than feeling burdened by more rigorous climate reporting the UK should lead the way.
“I think it comes down to UK leadership, and what the UK has consistently done in many aspects of financial regulation but certainly with respect to climate and climate transition, has been either at the absolute forefront or near the front of the peloton,” he said.
He added that Sunak’s plans announced at COP 26 and the launch of a Transition Plan Taskforce (TPT) to develop a gold standard for climate transition plan would encourage other countries to follow.
“The peloton, to keep the analogy, is going to follow, and are we shaping it,” he said. “Given [the UK is a] leading international financial centre it probably is appropriate that the UK plays that leading role in shaping this approach.”
Carney set to out to galvanise the world’s financial institutions around climate action last year as the special envoy to the UN, launching the Glasgow Financial Alliance for Net Zero and looking to secure signatories to the cause.
The alliance has been rocked by setbacks in recent months however, as firms pull back amid fears of legal action for failing to live up to the mark.
JPMorgan is reportedly among the firms to be considering withdrawing over concerns it could breach antitrust laws in the US if they took guidance on investment decisions from the UN campaign, the Financial Times reported.
Two pension funds became the first institutions to formally withdraw from the pledge last month over a lack of resourcing.
Carney insisted the initiative was still on track today however and had increased its signatories in the past year.
