Last Thursday 500 men and women packed into London’s Guildhall to hear the Bank of England’s outgoing governor Mark Carney, and Christine Lagarde, president of the European Central Bank. Launching the finance agenda of the UN’s COP26 climate summit, due to take place in Glasgow in November, Mr Carney and Ms Lagarde spoke of how important it is that companies — especially the banks and insurers they supervise — are transparent about their exposure to climate change risks. As the world moves towards a target of net zero carbon emissions companies will find themselves with a range of fossil fuel assets that will never be tapped. They could face large losses as a result. But so could the banks that lend to them, the insurers that underwrite them and the asset managers that invest in them. Analysis by the Financial Times’ Lex team concluded that meeting the terms of the UN’s Paris Agreement — to limit global warming to 2C — would leave 29 per cent of oil reserves stranded and wipe about $360bn from the value of the top 13 international oil companies by reserves. That is well over a sixth of their total enterprise value. Meeting a stricter warming target of 1.5C would more than double the figures to nearly $890bn.
FT 2nd March 2020 read more »