Climate change features heavily at the forthcoming International Monetary Fund/World Bank annual meetings in Peru next month – with Bank of England Governor Mark Carney’s remarks about the risks to the insurance sector just the latest sign that the issue is right at the top of the policymaking agenda.
Carney issued a stark warning that climate change poses a huge risk to global stability. Speaking at the Lloyd’s of London insurance hub, he drew attention to a rise in weather-related catastrophes and the increase in both the physical and financial costs.
Carney’s latest comments – and a new Bank of England report on the impact of climate change on the UK insurance sector – precede the annual meetings of the IMF/World Bank.
The two bodies each year bring together central bankers, ministers of finance and development, private sector executives, and academics; this year they take place in the Peruvian capital Lima on October 9-11 and there will be high level sessions on climate change and the financial system more broadly (link to agenda).
There will be a session on Wednesday October 9 looking at the IMF’s response to the challenges of climate change. This will feature IMF Managing Director Christine Lagarde, World Bank President Jim Yong Kim, UN Framework Convention on Climate Change’s Christiana Figueres and leading climate economist Lord Nicholas Stern.
Carney himself will be a speaker on the ‘Reshaping Finance for Sustainable Development’ session moderated by UNEP Executive Director Achim Steiner.There will also be a session devoting to unleashing private investment in renewable energy.
There will be another session on the topic, focusing on ‘Energy Pricing – Getting it Right’ featuring former Irish President Mary Robinson and British Columbia’s Environment Minister Mary Polak and others.
There will also be a panel on the World Bank’s proposed Environmental and Social Framework and its implications for borrowers. The bank launched the third round of consultations on the proposed measure earlier this year, focusing on implementation and on a list of “complex issues”. It touches on complex development matters, including human rights, climate change, and a number of social issues, the bank has said.
The event will also see the launch of UNEP’s Inquiry: Design of a Sustainable Financial System. The Inquiry fed into a meeting hosted by the Financial Stability Board, the international body chaired by the BOE’s Carney, on September 25 which focused on any financial stability issues that might emerge. The meeting followed a request in April from the G20 for the FSB to convene such a dialogue. The FSB said it would report to the G20 on potential follow-up that would “complement existing industry initiatives”.
Carney’s comments on the insurance sector were welcomed by Mark Campanale, Founder of the Carbon Tracker Initiative, which introduced the ‘stranded assets’ concept. He said: “Carbon Tracker welcomes this important milestone, a major international microprudential regulator clearly setting out for the first time how climate risk is a material financial risk.”