Speaking to reporters and investors at an event in Toronto on Friday (15 July), Carney called on the private sector to open up new green bond markets, while also increasing efforts to disclose climate-related risks to shareholders.

“In terms of what is the magnitude of clean energy or lower- carbon energy infrastructure and cleaner water sanitation that will be put in place over the next 15 to 20 years … it’s somewhere in the order of $5 to $7trn,” Carney said. “The question is how much of that is going to be financed through capital markets.”

Carney revealed that only around one-third of the world’s 1,000 largest companies were providing banks and stakeholders with active and effective climate disclosures, warning that “longer-term strategies are going to be much more important for evaluation”.

Refusing to answer any questions related to Brexit, Carney instead alluded to the next G20 Summit in China, which is scheduled for September. He claimed that green financing and bonds would form a major theme at the Summit and praised China’s leading role in driving the green finance market.

Even as the world’s largest emitter, China’s green bond market is estimated to be worth $500bn annually. Carney claimed that the Beijing market is keen to “open up” and that the Bank of England was already conversing with the People’s Bank of China in order to establish a green bond market that could finance larger sustainable projects.

The UK is already working with China to share knowledge and encourage investment in clean energy technologies, while the two countries are also collaborating on a £1.1bn project to create 8,000 zero-carbon homes in the UK.

Bonding sessions

Last week, a report from the United Nations revealed that green bonds have the potential to drive the global low-carbon transition, but standardised criteria will be critical for the future credibility of the market.

The UN report echoes the calls from WWF to implement ‘vigorous’ industry standards in order to overcome issues currently hampering investor confidence in financing green projects.

Fortunately, banks are already venturing into green finance markets. HSBC has launched a $1bn green bond portfolio aimed at the renewable energy sector, while Goldman Sachs announced it will leverage $150bn into clean energy financing and investments by 2025.

Speaking exclusively to edie, Dutch multinational banking group ING revealed it was preparing itself for a new era of green finance, which is geared towards complimenting the low-carbon movement and closed-loop operating models.

Matt Mace

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