Climate change is a ‘tragedy on the horizon’ for businesses, Bank of England chief Mark Carney warns

Climate change is a ‘tragedy on the horizon’ that could leave pension funds and other businesses with worthless assets, Bank of England chief Mark Carney warns

  • He said efforts to halt investment in fossil fuels were ‘not moving fast enough’
  • Those who did not change with the times would become ‘stranded’, warns
  • He made the comments to Radio 4 guest edited by Greta Thurnberg tomorrow

Pensions funds and other businesses risk seeing their assets become worthless unless they wake up to the climate crisis, Bank of England governor Mark Carney warns today. 

Mark Carney, who will step down in March, said efforts to halt investment in fossil fuels were ‘not moving fast enough’.

He said climate change was a ‘tragedy on the horizon’ for the planet but would also have enormous costs for businesses who failed to adapt.

Bank of England governor Mark Carney has warned businesses risk seeing their assets become worthless unless they wake up to the climate crisis

There is ‘no way’ all the resources held in reserve by polluting companies can be used if climate change targets were to be met, Mr Carney claimed.

As a result, he said those who did not change with the times would become ‘stranded’ with assets they could no longer use.

His comments came during an interview with BBC Radio 4’s Today programme – due to be broadcast today – that was guest edited by environmental campaigner Greta Thunberg.

A growing number of investment funds have supported so-called ‘divestment’ in recent years, which commits them to pull money out of companies associated with fossil fuels.

Activist group 350.org estimates that more than 1,100 funds, managing assets worth £8.4trillion, have so far pledged to do this.

However, pension funds that manage the nest eggs of tens of millions of Britons in many cases still have money invested in companies that campaigners say contribute to or benefit from the use of fossil fuels.

For example, FTSE 100 firms such as BP, Royal Dutch Shell, BHP Billiton, Anglo American, Rio Tinto and Centrica are all singled out as being ‘overvalued’ and ‘risky long-term investments’ because of their reliance on fossil fuels.

His comments came during an interview with BBC Radio 4's Today programme - due to be broadcast today - that was guest edited by environmental campaigner Greta Thunberg (pictured interviewing David Attenborough)

His comments came during an interview with BBC Radio 4’s Today programme – due to be broadcast today – that was guest edited by environmental campaigner Greta Thunberg (pictured interviewing David Attenborough)

However shares in the blue chip firms are widely held by many big retirement funds and FTSE 100-trackers.

Pressure from campaigners in recent years has seen some funds change course, however.

Both Ireland’s £7.6billion sovereign wealth fund and Norway’s £850billion fund have committed to divesting from fossil fuels, while calls for the UK Parliament’s £700million pension fund to do the same have been backed by hundreds of MPs.

When asked about divestment from fossil fuels, Mr Carney said investors ‘have to make the judgment and justify to the people whose money it ultimately is’.

Pressed on whether pension funds should divest from fossil fuels even if the returns are attractive, he said: ‘Well that hasn’t been the case but they could make that argument.

‘They need to make the argument, to be clear about why is that going to be the case if a substantial proportion of those assets are going to be worthless.’

And he warned: ‘If we were to burn all those oil and gases there’s no way we would meet carbon budgets.

‘Up to 80 per cent of coal assets will be stranded, [and] up to half of developed oil reserves.’

Mr Carney added: ‘A question for every company, every financial institution, every asset manager, pension fund or insurer: What’s your plan?’

Read more at DailyMail.co.uk