London, UK: City urged to attach 'climate risk' reports to pensions
By Jillian Ambrose
MPs want mandatory climate reporting within three years to avoid risk to investments
Britain’s biggest companies, investors and pension funds must come clean to investors on the financial risks they face due to the climate crisis, MPs have said.
The environmental audit committee (EAC) has called for the City of London to face mandatory climate reporting within the next three years to avoid jeopardising hundreds of billions of pounds worth of pension savings.
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The committee said it did not believe a voluntary approach would be effective and instead called for climate risk reporting to be mandatory on a “comply or explain” basis by the same deadline. The new plans would take effect by 2022 and include financial services firm, too.
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Writing an open letter in the Guardian in April, Carney and François Villeroy de Galhau, the governor of the Banque de France, urged financial regulators around the world to carry out climate change stress tests to spot any risks in the system, and called for a “massive reallocation of capital” to prevent global warming above the 2°C maximum target set by the Paris climate agreement. “If some companies and industries fail to adjust to this new world, they will fail to exist,” they said.
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