Mark Carney, former governor of the Bank of England, has called on the UK to once again take a leading role in helping the world embrace green finance.
In a speech at a Deloitte event, Carney said the UK has “traditionally led” on international financial developments but warned “it hasn’t been leading as much of late. It had other things on its mind.”
“It should lead (on green finance) because it has the expertise and the ability, it should lead it for the global good, but it also should lead it because it actually has benefits back here for the UK financial centres as well,” he said.
Carney cited the voluntary carbon market, which allows firms to trade credits to offset their emissions, as an area which should be a “London market”.
The carbon credit market has attracted controversy due to fears that permits have not accurately been capturing emissions, meaning there has been no real offset of emissions.
However, Carney said progress was being made on improving the integrity of the market, pointing out that the US government recently endorsed market standards.
“This is a huge deal,” he said. “This market is going to happen and this is a $150bn to $200bn market for the UK”.
‘Get on with it’
Carney also highlighted a couple of areas where the UK needed to move faster. He pointed out that the UK has delayed endorsing new International Sustainability Standards Board (ISSB) standards.These rules force financial institutions to make clearer disclosures on their exposure to polluting industries.
The UK’s delay means the rules will not come into place until 2027 whereas in other countries, such as the EU, Japan, Hong Kong and Singapore, the rules will be in place next year.
“Get on with it,” Carney said.
The delay on implementing ISSB standards also impacts the timeline for when firms need to publish transition plans, which detail how a company intends to transition to net zero.
“We need these plans…You got to have a strategy so I don’t know why we’re taking so long,” he said.
Looking beyond the financial sector Carney highlighted three priority areas for the next government to work on greening the economy, while recognising the tight fiscal position.
He highlighted that the grid needs to be “transformed” while also backing a “a comprehensive approach to retail decarbonisation,” in particular the housing stock.
Last year Mark Carney, governor at the Bank from 2013 to 2020, endorsed Labour’s package of economic policies and will be an adviser to the party’s promised National Wealth Fund.