large-firms-ignoring-climate-change-risk-bankrupt

Bank of England governor Mark Carney suggests he warns that companies which are not aiming towards net zero-carbon emissions are at detrimental risk of going bankrupt due to the efforts of financial investors.

Speaking with The Guardian, Carney suggested that the global efforts needed to tackle the current climate crisis could end up in a global financial collapse, perhaps reminiscent of the 2008 global financial crisis. Carney suggests that as time goes on the risk of financial collapse grows due to the worsening current global climate crisis.

In a recent report, the Guardian highlighted that only 20 fossil fuel companies produce coal, oil and gas linked to more than one-third of all emissions within the modern era. Furthermore, the Bank of England has said that up to £16 trillion of assets could be wiped out if the climate crisis is not addressed efficiently.

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However, Carney suggested that those working to put an end towards the climate crisis through the development of new technologies and the end of greenhouse emissions could reap large wealth – perhaps marking a new economic era in the global economy.

In an interview with The Guardian, Carney highlighted that US coal companies have already lost 90% of their value and were at risk, amongst others such as banks. He stated: “Just like in any other major structural change, those banks overexposed to the sunset sectors will suffer accordingly”. This is the definition of a sunset sector encompassing those industries which are experiencing a decline.

It is clear that we are treading into uncertain futures, and as Carney implies, the unpredictable climate crisis has great implications upon many aspects of society, not just the global economy.

However, the global economy cannot be overshadowed as – like demonstrated with the financial crisis of 2008 – the global economy is vital for integrity and stability to secure jobs and maintain the livelihoods of many across the globe.

In his interview with The Guardian, Carney quoted banker James Gorman who raised an important point: “If we don’t have a planet, we’re not going to have a very good financial system”.

There is great emphasis on what the future may bring. The UK has a chance to become a global leader and mark a shift in the necessary need for financial change in order to preserve our planet.

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The driving out of sunset sectors only brings rise to new more eco-friendly and innovative job sectors more suited for a sustainable future. If handled correctly, the financial implications of the global climate crisis may not be detrimental, but then again that takes grit and determination from global leaders.

Notably, UK Labour Party leader Jeremy Corbyn said: “Labour will delist companies that fail to meet environmental criteria from the [London Stock Exchange], and reform the finance sector to make it part of the solution to climate change instead of lending to companies that are part of the problem.”

The comments made in reaction to the issues highlighted by the Guardian perhaps are marking a shift in position by democratic leaders, offering hope for our economy and the future of a planet in a unified marriage of finance and the preservation of our planet.