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Firms must justify investment in fossil fuels warns Outgoing Bank of England governor

The outgoing governor of the Bank of England, Mark Carney, has said all companies and financial institutions must justify their continued investment in fossil fuels, and warned that assets in the sector could end up “worthless”.

In an interview with BBC Radio 4’s Today programme being broadcast on Monday, Carney said that although the financial sector was starting to cut back on investment in oil and gas companies, the process was not moving quickly enough.

The Bank of England has said assets worth up to $20tn (£16tn) could become worthless very quickly…

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Related extracts from Telegraph article: Pension fund investments held by millions could be rendered worthless by climate change crisis, warns Mark Carney

Mark Carney has claimed the pension fund investments held by millions of people could become “worthless” unless the financial sector reacts quicker to the climate change crisis.

Financial firms are starting to curb investment in fossil fuels but are “not moving fast enough,” the Bank of England governor will say in an interview for an edition of the BBC Today programme edited by Greta Thunberg, the teenage environmental campaigner.

The Bank of England claims up to £16 trillion of assets could be wiped out if the climate emergency is not addressed effectively including by banks and pension funds over-exposed to “sunset” fossil fuel industries.

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Related extracts from Phys.org article: BoE chief calls for faster action on climate change

Asked whether pension funds should divest from fossil fuels even if the returns are currently attractive, 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.”

Carney noted that “up to 80 percent of coal assets will be stranded (and) up to half of developed oil reserves” if current climate targets are to be met.

Shell’s gas and new energies director Maarten Wetselaar, acknowledged the need for “urgent action” on climate change by companies.

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