If companies are relying on CCS to achieve net zero carbon emissions, investors will want to assess how they plan to get there – and who they expect to pay for it. 26  The IPCC estimates that additional investment of $ 190-900bn is required annually in the energy sector alone if the rise in average global temperature is to be capped at 2C. www.ipcc.ch/report/ar5/ Mercer estimates that additional cumulative investment in efficiency improvements, renewable energy, biofuels and nuclear, and carbon capture and storage could be in the range of $ by 2030. www.mercer.com/insights/point/2014/climate-change-scenarios-implications-for-strategic-asset-allocation.html  8  BIS central bankers’ speeches  of attempting to use such changes in prudential rules – designed to protect financial stability – for other ends. More properly our role can be in developing the frameworks that help the market itself to adjust efficiently. Any efficient market reaction to climate change risks as well as the technologies and policies to address them must be founded on transparency of information. A “market” in the transition to a 2 degree world can be built. It has the potential to pull forward adjustment – but only if information is available and crucially if the policy responses of governments and the technological breakthroughs of the private sector are credible. That is why, following our discussions at the FSB last week, we are considering recommending to the G20 summit that more be done to develop consistent, comparable, reliable and clear disclosure around the carbon intensity of different assets.

While a given physical manifestation of climate change – a flood or storm – may not directly affect a corporate bond’s value, policy action to promote the transition towards a low-carbon economy could spark a fundamental reassessment. Take, for example, the IPCC’s estimate of a carbon budget that would likely limit global temperature rises to 2 degrees above pre-industrial levels. That budget amounts to between 1/5th and 1/3rd world’s proven reserves of oil, gas and coal. 24  20  See AM Best – Special Report: Asbestos Losses Fueled by Rising Number of Lung Cancer Cases (2013) www.ambest.com/ambv/bestnews/presscontent.aspx?altsrc=0&refnum=20451. 21  See Roe v Arch Coal Inc et al, Case: 4:15-cv-00910-NAB, United States District Court, Eastern District of Missouri, 9 June 2015 and Lynn v Peabody Energy Corporation et al, Case: 4:15-cv-00916-AGF, United States District Court, Eastern District of Missouri, 11 June 2015. Note that as at 1 September 2015 the defences to these claims were yet to be filed. 22  Loss and damage refers to impact of climate change not mitigated by reductions in emissions. The UNFCCC Warsaw agreement in 2013 discussed support for measures to address loss and damage. See http://unfccc.int/resource/docs/2013/cop19/eng/10a01.pdf. 23  The largest UK insurers hold or manage in excess of £ of CRE and infrastructure assets, and have committed to further such investments in future. For instance, six major insurers pledged to invest £ into UK domestic infrastructure in 2013 as part of the Government’s national infrastructure plan (see http://www.ft.com/cms/s/0/1f74e176-5c41-11e3-b4f3-00144feabdc0.html).