remarks at the accounting for sustainability summit 2018 remarks given by mark carney, governor of the bank of england accounting for sustainability forum, st. james ’ s palace london 21 november 2018 i am grateful to alice carr, emma dalhuijsen, edd denbee, vishal desai, sini matikainen and jennifer nemeth for their assistance in preparing these remarks. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx i would like to thank his royal highness the prince of wales and accounting for sustainability for inviting me today. it is an honour to be able to mark his 70th birthday in this way. we are gathered at st james ’ palace, but not for a lavish celebration. it is to hrh ’ s credit that this happy occasion is marked by a serious discussion of the risks and opportunities posed by climate change and the transition to a low carbon economy. his royal highness has provided inspirational leadership on these critical issues for decades. indeed if we had heeded his advice when it was first offered, we might have already solved the tragedy of the horizon! examples of hrh ’ s leadership range : from domestic initiatives within the prince's responsible business network to help ensure uk businesses and communities are resilient to the effects of climate change ; to launching the climatewise principles and encouraging the insurance industry to take a leading role in addressing risks posed by climate change ; to support for our hosts accounting for sustainability, who have for many years given practical guidance to firms on how to embed sustainability considerations into business decision - making. i have had the great pleasure of engaging with hrh on a number of occasions, and i can think of few people more knowledgeable about the sustainability agenda or as committed to it. four years ago, he rightly put me on the spot, highlighting that climate - related risks will have serious financial impacts, and asking what regulators were doing about them. hrh ’ s challenges are even more germane today as the impacts of climate change continue to mount and the time to act continues to shorten. this year has seen blistering heatwaves in north america and europe, hurricanes in north america and typhoons in south east asia ; droughts in southern africa and australia ; unprecedented rainfall causing deadly landslides in japan ; and now the devastating wildfires in california. the human costs of these events are immeasurable. and the financial losses are significant.

- performing loans are still unresolved in a number of countries, which means the risk situation differs strongly from one national banking system to the next. i will return to this particular point later in my statement today. while a recently published draft report by esther de lange at the european parliament does already address some of the criticism levelled at the commission proposal, that paper indicates that the proposed initial re - insurance phase starting in 2019 will still take place without any riskreduction measures whatsoever. that would be inacceptable in my view. my conclusion from this is that we should stick to the current system – harmonising the national deposit insurance schemes – as long as many outstanding issues remain unresolved. for all the progress that has been made towards deeper integration, european unity suffered something of a setback on 23 june this year. that was the day on which the uk electorate voted against the country ’ s continued membership of the european union. that brings us to the topic 1 / 5 bis central bankers'speeches of “ less europe ". i won ’ t wade into the political debate today, but focus instead on what brexit means for financial markets. five months on from the uk referendum, we can say that the european financial system has done a pretty good job overall of absorbing the outcome of the vote. apart from a bout of heightened financial market volatility, notable share price losses, particularly among bank stocks, and the sharp depreciation of sterling, the brexit vote did not unleash any turmoil in financial markets, nor, might i add, was there ever any risk of a financial crisis. there are two reasons for this. first, the good level of resilience that has now been achieved in the european financial system. second, and no less important, the response shown particularly by the bank of england. nonetheless, the long - run repercussions of the brexit vote will only really come into view when we get a better idea of the outcome of the forthcoming exit negotiations. the signals which the uk government is currently sending out would appear to suggest that a “ hard brexit ” might be in store – that is, the uk would leave not just the eu but also the european economic area. that would spell the end of the current eu passporting regime – an arrangement which presently enables financial institutions domiciled in the uk to offer their products and services across the entire european economic area. it also permits continental european institutions to