Our prudential work has also broadened to consider the impact of climate-related risks to the UK banking sector. We have now completed our initial engagement with the industry and are synthesising our findings. We expect to publish these later this year. From our prudential work, it is clear that consideration of the financial risks from climate change has significantly evolved over the last few years. There is a transition in thinking underway as climate is increasingly seen as a core strategic risk issue, rather than a matter solely for those managing firms’ ‘corporate responsibility’ strategies. As I will come to later, while this transition in thinking is encouraging, and the direction is correct, we need to make sure the speed of progress is sufficient. 2  Carney (2015), “Breaking the Tragedy of the Horizon – climate change and financial stability”, speech given at Lloyd’s of London, September 2015. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  3  The second element relates to the Bank’s financial stability objective. As discussed elsewhere , financial stability risks could arise from a late and sudden transition to a lower carbon economy. An abrupt transition could particularly impact carbon-intensive sectors. And as I said earlier, by the time climate change becomes a clear risk to financial stability, it may already be too late.
4  All speeches are available online at www.bankofengland.co.uk/speeches  4  And the TCFD is here to stay through the power of market uptake - with 250 major companies representing $ trillion of market capitalisation and financial institutions (banks, insurers and asset managers) responsible for $ of assets already having committed to make these disclosures and to talk to the users of information about how to sharpen and refine what disclosures are provided. Green Finance It’s perhaps less obvious that I, as a regulator and central banker, but wholly understandable that many of you here in the room, might be focused on the opportunities as well as the risks from climate change – and specifically the opportunity to ‘mainstream’ Green Finance. Unfortunately, measuring and tracking green financing comprehensively is difficult, partly due to the lack of criteria, indicators and a clear taxonomy, and so an absence of proper green labelling. But we can accurately measure the labelled green bond market. This has continued to develop rapidly: issuance reached over $ in 2017, and is forecast by some to pass $ this year overall. There have also been significant innovations in recent years. For example, the Agricultural Bank of China issued a green RMB bond and Bank of China issued the first ever green covered bond in 2016. We have also seen an increase in sovereign green bond issuance including from Poland, France and Nigeria. 4  But whilst welcome, this is not enough.