by Nell Achtmeyer T’16
Kelsey and I stumbled into one of the most interesting sessions of the week so far–a press conference with Michael Bloomberg and the Governor of the Bank of England, Mike Carney. The press conference was to formally announce the new voluntary, private led task force to determine the right type of information to have to judge a company’s risk on climate. Governor Carney announced that Mr. Bloomberg will serve as the Chairman of the task force and be charged with overseeing the process to determine what comprehensive, reliable and comparable data the investor community needs to understand climate risk. Governor Carney said that he hoped it would be the “one stop shop for information on climate to aid this transition to a low carbon economy.”
Throughout the week, there have been many other indications that this conference is “more of an economics conference than one specially on climate,” as one panelist said the other day, but this afternoon’s press conference only reinforced that with the presence of a Governor from one of the world’s largest central banks. The role of the financial markets is something that has been brought up repeatedly in workshops, breakout sessions, and press conferences like these that outline the work related to understanding climate risk and putting a price on carbon after Paris. While the announcement of a task force might be commonplace at these big types of international conferences, this particular type of task force, which features such a prominent businessman and former American mayor, and looks to boil down the existing standards and metric schemes to focus solely on climate risk, is certainly noteworthy. As Mr. Bloomberg said, “if you can’t measure it, you can’t manage it” and this climate risk task force will aim to do exactly that– inform the investor community with information to take a view on a company’s risk exposure to climate change and judge the management of these companies and whether they have the strategies to adjust their business model to stand up to this low carbon transition. Furthermore, Mr. Bloomberg and Governor Carney both talked about how the information will be useful for CEOs who will also benefit from this information and the ability to use targeted metrics on risk exposure to climate factors to justify and explain decisions made to their various stakeholders.
While the press have already picked up this story, including a release by Forbes this afternoon, for our Tuck delegation, this reinforced just how many eyes will turn to business and financial market leaders after Paris to help move the work forward to actually achieve the low carbon economy that we are all talking about.