The private sector must not miss the chance to shape the economy of the future, said United Nations special envoy for climate action and finance Mark Carney.
Speaking at the virtual British Private Equity & Venture Capital Association‘s annual summit on 8 October, the former governor of the Bank of England who joined Brookfield Asset Management as vice-chair and head of ESG and impact fund investing in August, said that SMEs and their owners need to think about which questions are “decision-useful” when it comes to monitoring their carbon footprints and the climate resiliency of their assets.
“We are looking to get the best ideas and expertise from the private sector on new regulations, new formats around reporting, risk management, reporting returns so that you have the right information and can communicate to your LPs,” he said.
Some of the biggest asset owners in the world are driving the transition, he added, with groups representing $5 trillion in assets now signed up to the Net-Zero Asset Owner Alliance.
Members vow to get the carbon emissions of their investment portfolios to net-zero by 2050 and include private equity investment giants Allianz, the California Public Employees’ Retirement System and Caisse de dépôt et placement du Québec, according to the UN-backed organisation’s website.
“As the [covid-19] crisis crystallised, I and others wondered if the immediacy of the crisis would crowd everything else out,” Carney said. “That has not been the case, particularly in the financial sector where there is this recognition of where the economy goes from here, where the opportunity set is, who’s going to be a leader, who’s going to be a laggard.”
Carney took the UN role in December. A key focus is helping mobilise private finance to achieve the goal set out in the Paris Agreement of limiting the rise of global temperatures to 1.5 degrees Celsius.
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