A decade after Prime Minister Mark Carney first warned the world’s financial sector about the looming risks of climate change, more than 50 Canadian, American, and European organizations are calling on him to act decisively as Canada’s leader.
The open letter, released Monday and signed by groups including Environmental Defence Canada, Union of Concerned Scientists, Climate Action Network, and Investors for Paris Compliance, warns that the global financial system is now confronting the very instability Carney predicted in his 2015 “tragedy of the horizon” speech at Lloyd’s of London.
Carney’s 2015 Warning
In his role as Governor of the Bank of England, Carney identified three critical risks:
- Physical risks from natural disasters and climate-driven events.
- Legal risks from lawsuits by climate victims against major polluters and insurers.
- Transition risks tied to the declining value of fossil fuel–based assets.
At the time, Carney urged banks and investors to integrate climate risks into their financial strategies, framing the Paris Agreement not just as an environmental accord, but also a financial safeguard.
A Decade of Limited Progress
While the speech led to climate disclosure initiatives and the launch of the Net-Zero Banking Alliance, progress has faltered. Major financial institutions—including all six of Canada’s largest banks—have recently exited the UN-backed alliance, citing geopolitical uncertainty following Donald Trump’s return to the U.S. presidency.
According to BloombergNEF, Canada’s major banks poured over US$145 billion (C$202B) into fossil fuels last year, nearly double the US$75 billion (C$104B) directed to low-carbon energy projects.
“We are seeing setbacks. Ten years on, climate action is facing significant geopolitical challenges,” said Eddy Pérez, climate diplomacy expert and Université de Montréal lecturer, who noted that Carney’s original speech reshaped the global conversation.
Calls for Action
In their joint letter titled “A Call for Global Financial Reform”, signatories urged Carney’s government to:
- Require banks to publish climate transition plans aligned with Paris Agreement targets.
- Mandate financial disclosure of climate-related risks.
- End support for new coal, oil, and gas projects.
“Ten years ago, the financial sector was warned. It listened, but it did not act decisively. Today, the risks are higher, the stakes greater, and the time shorter,” the groups wrote.
Environmental Defence Canada’s Julie Segal, who served on the advisory committee for the now-defunct Bill S-243 on sustainable finance, stressed that Carney has both the expertise and responsibility to move Canada forward.
“Our Prime Minister is well aware of the risks to the Canadian economy of falling behind,” Segal said. “We are asking Mark Carney to take action.”