Carney warns firms must cut back on fossil fuel investments

Bank of England governor Mark Carney said all companies and financial institutions must justify their investment in fossil fuels and advised firms to cut down on them as assets in the sector could end up “worthless”.

Carney told the BBC that although the financial sector was starting to cut back on investment in oil and gas companies, it wasn’t doing so quickly enough.

According to the BoE, assets in the sector worth up to $20trn (£16trn) could become worthless very quickly.

The Governor also said that fund managers would “have to make the judgment and justify to the people whose money it ultimately is.”

He told the programme that the climate crisis was a “tragedy on the horizon” and that more extreme weather events were inevitable. “By the time that the extreme events become so prevalent and so obvious, it will be too late to do anything about it,” he said. Political leaders had to “start addressing future problems today.”

Carney also warned: “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. A question for every company, every financial institution, every asset manager, pension fund or insurer: what’s your plan?”

The Governor was on his way out of the BoE and was set to become a UN special envoy for climate change and finance in 2020.