Businesses to Get Guidelines for Disclosing Climate-Related Risks

New York Times - Sewell Chan

Michael R. Bloomberg, the former mayor of New York, at the Paris climate talks on Friday. Ian Langsdon/European Pressphoto Agency

LE BOURGET, France — Climate change is going to have a powerful effect on capitalism, and the titans of industry and finance are trying to get a handle on it.
"No C.E.O. could survive if they tried to say that climate change isn't real," Michael R. Bloomberg, the former mayor of New York and co-founder of Bloomberg L.P., said on Friday.
He was joined by Mark Carney, a Canadian economist who is the governor of the Bank of England and the chairman of the Financial Stability Board, an international body that makes recommendations about the global financial system.
Mr. Carney announced on Friday that Mr. Bloomberg would lead a task force to draw up guidelines for companies to use when disclosing climate-related risks to lenders, insurers and investors.
Mr. Carney made headlines in September when he said in a speech that climate change posed huge risks to financial and economic stability.
Elaborating on that theme, he said on Friday that capitalism needed time to adapt to a low-carbon economy.
"What we don't want to see is an abrupt transition," Mr. Carney said. "The issue that the private sector has — whether they're investors in companies, or providers of capital and credit — the issue is that they don't have the right information to judge how well individual companies are managing that risk."
Mr. Bloomberg's task force "ideally is going to be the one-stop shop for the right principles around climate, so that there can be a true market in the transition toward a low-carbon economy," Mr. Carney added.
Climate-related transparency has been big news lately. Last month, the New York State attorney general, Eric T. Schneiderman, began an investigation to examine whether Exxon Mobil accurately communicated climate risks to shareholders.
Mr. Bloomberg expressed contempt for the "right-wing crazies that say climate change is a communist plot that doesn't exist." He added that politicians, unlike businesspeople, could afford to take extreme positions.
"This is theater," he said, when asked about the Republican primaries. "It really is a serious issue as to what a candidate would do if they ever got elected, but I don't know if you could find that out from the kabuki dance that we go through to select candidates."
Governments can send the right signals, but ultimately the markets and consumers will see the light, he said.
"In the end, the public's a lot smarter than they're given credit for by the press, and a lot smarter than the government," Mr. Bloomberg said.
Mr. Carney pointed out something that until recently only activists had been saying: It may take a long while, but for global warming to stop, carbon emissions will have to drop to almost nothing.
"Ultimately, whatever degrees of centigrade the climate settles at, you have to get to net zero, ultimately, to stabilize, whether it's two degrees or beyond," he said.