Bank of England’s Carney: Business must come clean quickly on climate

Mark Carney, Governor of the Bank of England, believes that major companies need to p
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Updated 15 February 2020

Bank of England’s Carney: Business must come clean quickly on climate

LONDON: Bank of England Governor Mark Carney called on the world’s businesses to publish strategies for cutting carbon emissions and adopting cleaner power sources by November, when world leaders meet in Scotland for UN-led climate talks.

“It’s not just green assets and divestment campaigns or certain things are so brown or black. Every company ultimately has to have a plan for a transition and what the opportunities are and where the risks are,” Carney said.

“For Glasgow that must be well on the path. That that is the norm. That the question doesn’t even have to be asked because companies are answering that question as part of their strategy.

“And the answer is, it’s the transition, stupid,” he said, referencing a phrase coined by former US President Bill Clinton’s election strategist in reference to the US economy.

Carney was speaking to Reuters a month before he leaves his nearly seven-year posting at the helm of the UK’s central bank to take a new role as the UN envoy for climate.

The Canadian banker, who disarmed the British insurance industry in 2015 when, in a speech called “Tragedy of the Horizon,” he warned of their exposure to climate-related events, has been one of the most vocal public figures to push for better supervision and disclosure of climate risk.

The Task Force on Climate-related Financial Disclosures (TCFD), which he launched in 2015, has become a global standard that more than 1,000 companies, financial firms, governments and other organizations have adhered to.

But it remains voluntary, and it can be hard to compare and verify the claims of disclosures.

Hammering out a common set of global reference points on climate-related disclosures is seen by many as a crucial step to helping investors allocate capital more effectively.

Money would flow to those companies managing the risks — and therefore likely to perform better in the transition to a low-carbon economy — and away from those in danger of being impacted more severely.

Carney said November’s COP26 climate talks would also be a good deadline for regulators to map out how to make the TCFD framework compulsory.

“One of the things we will look at ahead at for the COP26 is ‘should we have pathways to make the TCFD mandatory?’ Not overnight, but through listing requirements or securities regulation disclosure standards,” he said.

Such an effort needs to be global, Carney added, encompassing regions laying out their own plans for cutting emissions. The EU recently announced a 1 trillion euro ($1.08 trillion) effort become carbon neutral by 2050, a strategy that includes introducing a new climate law by next month.

“It would be productive if other jurisdictions that potentially will have mandatory disclosure standards ... used more conventional routes than legislation, such as securities regulations or listing standards. Let’s have that conversation,” Carney said.

Carney could play an outsized role at November’s summit, especially in view of UK Prime Minister Boris Johnson’s government reshuffle on Thursday, which saw Chancellor of the Exchequer Sajid Javid resign.

Those who lost their job included energy minister Claire O’Neill, who had been named to lead the November talks in Glasgow. Alok Sharma was appointed to the position as her replacement.

Efforts by businesses, investors and financial institutions to disclose climate risk are gathering pace.

BlackRock, the world’s largest money manager with nearly $7 trillion in assets under management, said this month that it would take a tougher view of companies that were not properly disclosing their climate risk.

This week, BP set out one of the oil sector’s most ambitious targets for curbing carbon emissions, saying it would reduce its greenhouse gas emissions to net zero by 2050. The fossil fuel giant plans to give more details about the plan later this year.

“Last week, very few people would have said BP was Paris-aligned,” said Carney, referring to the 2015 global climate agreement, signed in the French capital. “They’ve jumped from toward back of the queue to the front of the queue.”


NMC Health removes CEO amid investigation of UAE firm’s finances

Updated 27 February 2020

NMC Health removes CEO amid investigation of UAE firm’s finances

  • Chief Executive Prasanth Manghat was dismissed with immediate effect
  • Chief Operating Officer Michael Davis was appointed as interim CEO

NMC Health has removed Chief Executive Prasanth Manghat with immediate effect and granted its finance chief extended sick leave, as more details emerge from an investigation into the UAE health care firm’s finances.
Abu-Dhabi based NMC said after Wednesday’s market close that it had appointed Chief Operating Officer Michael Davis as interim CEO to succeed Manghat and said Chief Financial Officer Prashanth Shenoy had been placed on longer leave.
Manghat had been with NMC for about 10 years in various roles, including deputy CEO and CFO, and had seen the company through its 2012 listing on the London Stock Exchange.
The moves are the latest blow for the firm whose shares have lost about two thirds of their value since US-based short-seller Muddy Waters late last year questioned its financial statements.
NMC had said at the time that the report was “false and misleading,” but had opened its own investigation into company finances. The review is being led by Louis Freeh, who was director of the Federal Bureau of Investigation in the United States from 1993 to mid-2001.
NMC on Wednesday said the investigation committee had identified supply chain financing arrangements that were entered into by the company and “which are understood to have been used” by entities controlled by founder BR Shetty and former vice-chair Khaleefa Butti Omair Yousif Ahmed Al Muhairi.
Reuters was unable to reach Manghat, Shetty and Muhairi for comment outside business hours on NMC’s latest statement.
The company, which operates clinics and hospitals, specialized maternity and fertility clinics, and long-term care homes in 19 countries, said the committee was reviewing a drawdown of its facilities that had not been disclosed or approved by the board.
Its shares closed 6.6% higher before Wednesday’s statement.
NMC also said it had suspended a member of its treasury team over possible discrepancies in its bank statements and ledger entries, and said it would be unable to publish its annual results till at least the end of April.
Indian billionaire Shetty resigned as NMC’s co-chairman this month, after British regulators said they were looking into NMC following a disclosure that he had misstated the size of his stake.
Shetty had said this month that his NMC shareholdings were under a legal review looking into a large portion of his shares signed to two of NMC’s top investors in 2017, while some of his other stock had been pledged as security against loans.