Remarks on the launch of the Recommendations of the Task Force on Climate-related Financial Disclosures Mark Carney Chair of the Financial Stability Board Governor of the Bank of England  Delivered at the Tate Modern 14 December 2016  1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  Welcome  It is my great pleasure to have been invited, in my capacity as Chair of the Financial Stability Board (FSB), to help launch the Task Force on Climate-related Financial Disclosures consultative report. 1  In late 2015, at the request of the G20 , the FSB established this private-sector, industry-led Task Force, under the leadership of Michael Bloomberg. Its mandate was to develop recommendations for voluntary, consistent, comparable, clear and reliable disclosures around climate-related financial risks for companies. The purpose was to provide the information that investors, lenders, insurers and other stakeholders need to manage these risks, and seize the associated opportunities. As those of you who’ve had an opportunity to read their report will have seen, the Task Force has achieved a great deal during the year. So on behalf of shareholders, creditors and citizens, I thank all of the Task Force members for their tremendous efforts, and your companies for making you available for this important work. If you want a job done well, give it to busy people. Public authorities – like the G20 and the FSB – could identify the problem, but we needed the private-sector to provide the solution. This is a solution for the market, by the market.

This will ensure investors know how much utility companies are investing in low carbon alternatives. And what progress car manufacturers are making towards fuel efficiency. Scenario analysis  The recommendations recognise also that static disclosures of current carbon footprints will not be sufficient to reveal a company’s climate-related financial risks and opportunities. For investors to price financial risks and opportunities correctly, they need to weigh firms’ strategies against plausible public policy developments, technological advances and evolving physical risks and opportunities. In a ground breaking innovation, the Task Force recommends that companies explore and disclose the potential impacts of climate-related risks and opportunities on their businesses, strategies and financial planning under different potential future scenarios. A full exploration of transition risks may require consideration of financial risks and opportunities under several scenarios, which firms may develop directly or using commonly available models. Reflecting the commitments made in Paris, the Task Force recommends that this should include using a 2-degree scenario. And consistent with the concept enshrined in the Paris Agreement of common but differentiated responsibilities, transition scenarios could take account of different national targets for emissions reduction. This makes them particularly useful for companies headquartered in emerging economies. 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  Over time, the Task Force expects to see a greater emphasis on quantitative analyses in scenario-related disclosures, including the underlying assumptions associated with the climate-related scenarios used. Scope extends to asset owners and managers.