The outgoing Governor of the Bank of England, Mark Carney, has said that thousands of UK pension schemes could be at risk of becoming worthless due to the challenges of climate change.
Speaking during an interview with Radio 4’s Today programme, Carney said that every investor should be considering their plan when it came to climate change and how it could affect their assets and savings.
The Governor was invited on to a special show guest edited by Greta Thunberg, who asked whether pension funds should stop investing in fossil fuels even if the returns were attractive.
In response Mark Carney said: “Well that hasn’t been the case but they could make that argument. They need to make the argument, to be clear about why is that going to be the case if a substantial proportion of those assets are going to be worthless.”
There are growing fears generally that too many pension schemes are too tied to fossil fuel industries and that in the event of a rapid change to the economy to meet carbon targets many people could end up with worthless investments when they come to retire, despite fossil fuel backed investments proving historically to be relatively safe.
Mr Carney described climate change as a “tragedy on the horizon” and said there would be “more extreme weather events”, but that “by the time that the extreme events become so prevalent and so obvious it will be too late to do anything about it. We look to political leaders to start addressing future problems today.”
Mr Carney’s wife, Diana, is a prominent environmental campaigner and in September he addressed the United Nations’ Global Climate Action Summit in New York on risks to financial stability.
He will step down from his role at the Bank in March to take up a role as the UN’s special envoy on climate change, where he is expected to help financial markets deal with the challenges that climate change may bring.