Canadian fossils ended the year bracing themselves for closer scrutiny after departing Bank of England Governor Mark Carney declared that half of the world’s oil and gas reserves could become stranded assets, leaving millions of peoples’ investments “worthless”.
Appearing on a guest segment of the BBC’s Today program guest edited by #FridaysforFuture founder Greta Thunberg, Carney said the financial sector is “not moving fast enough” to divest from fossil fuels, and has not yet woken up to the looming crisis it faces, The Independent reports.
Carney, who previously served as governor of the Bank of Canada, is set to become the UN special envoy for climate action and finance in February.
In the interview, Carney was asked whether pension funds should dump their fossil holdings even if their returns are looking good at the moment, The Independent says. “Well, that hasn’t been the case, but they could make that argument,” he replied. “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.”
Carney added that, “if we were to burn all those oil and gases, there’s no way we would meet carbon budgets. Up to 80% of coal assets will be stranded, [and] up to half of developed oil reserves.”
Which means financial firms “have to make the judgment and justify to the people whose money it ultimately is” in relation to divestment, he told BBC. “A question for every company, every financial institution, every asset manager, pension fund, or insurer—what’s your plan?”
Carney’s comments raised concern among Canadian fossil companies that his call for “further climate disclosures and climate risk assessments from global banks could increase scrutiny of investments in the Canadian oilsands and nascent liquefied natural gas sector,” the Financial Post writes. With the world’s third-largest oil reserves, “the Canadian oil and gas industry has long been at the centre of the debate about financial institutions and climate change, thanks in part to major European banks such as HSBC Plc and BNP Paribas announcing they would not invest in new projects in the oilsands. Large pension funds in Europe and North America have also signalled plans to divest their holdings in heavy oil companies—moves which have hurt the Calgary oilpatch.” MORE