Bank of England Governor Mark Carney came home to Canada on Friday to throw his considerable credibility behind making climate change a business priority.
It's a campaign that speaks to two things: Growing awareness of the need for real-world solutions for the issues that come with a warmer planet and the ongoing evolution of Mr. Carney as central banker-cum-rock star. How many other financiers are introduced with a reference to their recent time in the London Marathon; an impressive three and a half hours?
Sharing a podium with Canada's Environment Minister Catherine McKenna in a packed-to-the-rafters breakfast in a cavernous Toronto ballroom, Mr. Carney had a message to deliver: Climate change is real, it carries staggering risks and costs for business and corporate leaders, and politicians need to take action. An ominous message delivered with humour, as Mr. Carney deadpanned: "Making obvious points is a central banker specialty. But obvious points are made very seriously."
Now, some in the crowd may wonder why a central banker, whose responsibilities, narrowly defined, would start and stop with setting interest rates, chooses to make climate change his issue. In the same vein, Mr. Carney took heat from British politicians who felt he exceeded his mandate by weighing in on the dangers of Brexit during the highly partisan runup to last month's referendum.
That narrow definition of central banker as dutiful civil servant is not for Mr. Carney. He clearly aspires to far more influence at the Bank of England, as he did in his turn as head of the Bank of Canada. That ambition, that drive to make a difference, is so apparent that parlour games playing out in the press table as Mr. Carney spoke included taking a drink each time someone said Brexit – just three mentions – and speculating on what the 51-year-old financier will do as a follow-up to the top job on Threadneedle Street, which currently only runs for two more years and features a brand new boss.
On climate change and other economic issues, Mr. Carney clearly intends to use the pulpit he enjoys as England's central banker and head of the Group of 20's Financial Stability Board to ensure banks, insurers and other financial institutions are strong and resilient in the face of unexpected events; the near-death experience of the global financial crisis remains top of mind. In his remarks Friday, Mr. Carney said: "What keeps central bankers up at night is the threat of a sudden change in risk, such as the one we saw in 2008."
The central banker is not planning to tackle climate change solo. Mr. Carney nonchalantly but tellingly dropped the names of allies in finding solutions to global warming, mentioning that Michael Bloomberg is on board, along with Larry Fink of BlackRock; the corporate A-list.
There was recognition Friday from Mr. Carney and Canada's Ms. McKenna that spurring corporate players into action on climate change will not be easy. Ms. McKenna spoke of a recent meeting with energy companies that revealed that those who went above and beyond on disclosure of greenhouse gas emissions believe their image and stock price suffered compared to rivals with minimal GHG disclosure, an investor attitude that she and Mr. Carney agreed was in need of adjustment.
On the issue of what the future holds for Mr. Carney, the central banker was understandably discreet on Friday. There's nothing but downside for a civil servant to speculate on what's coming in the wake of Britain's decision to quit the European Union; Mr. Carney exited the event Friday without giving interviews, off for a brief vacation with his brother; he has two, and all three Carney boys went to Harvard University.
There's been persistent speculation that Mr. Carney harbours political ambitions in Canada. Born in the Northwest Territories, he flirted in the past with the federal Liberals Typically, retired central bankers write memoirs, or join global financial firms to pad their bank accounts. Neither option suits Mr. Carney's interest in save-the-planet issues such as global warming.
As someone who has crossed paths with Mr. Carney across two decades – he worked for Goldman Sachs prior to going to Ottawa to work in the Finance Department and Bank of Canada – I saw something telling in Friday's presentation. In the past, Mr. Carney was not averse to demonstrating he was the smartest guy in the room; his disdain for press questions he deems dumb is legendary. On stage Friday, he made a point of talking about complex issues in simple folksy terms: Think Bill Clinton, without that need to be adored.
And the central banker only needed to look at the crowd Friday to know a call to action on climate change resonates. In a sea of suits at a downtown hotel, a significant portion of the audience had bike helmets on tables, or under chairs: They rode to the event, rather than drive. Mr. Carney is a banker in touch with the times.
Andrew Willis