Demand for climate-related financial disclosure is "very high" and could become mandatory, according to former Bank of England governor Mark Carney.
Speaking at the Personal Investment Management & Financial Advice Association (PIMFA) Virtual Fest today (3 June), Carney said "banks want it, insurance companies want it, the ratings agencies want it".
"From a demand side, the demand for this type of disclosure is very high. We're talking about companies with huge balance sheets. If you total up the assets under management it is $130trn," he said speaking in his capacity as UN special envoy for climate action and finance.
He made the comments in relation to the scale of the challenge faced by world leaders in reducing carbon emissions.
Carney explained the recent Covid-19 crisis had seen a 6% fall in the level of global carbon emissions. However, he added: "We would need to see that globally compound in order to achieve net zero emissions by 2050. So the scale of the challenge is quite significant. This is a whole economy adjustment, this isn't just about niche products or renewable solutions."
Carney added there had already been progress during the two reporting cycles which had taken place under the parameters outlined by the Task Force on Climate-related Financial Disclosure.
Delegates heard the terms of those disclosures were being refined to be as consistent as possible for the end user and the next step would be for such disclosures to be made mandatory.
Elsewhere, he said the financial services sector had "jumped ahead" of government on development of strategies and solutions to climate change.
The ex-Bank of England governor said: "Companies that have a strategy will be rewarded. This is not a passive investment strategy, you need the information but you also need the judgements around it.
"So yes I do think the industry is leading and I think the public will soon jump a bit ahead of us as well."
Carney said one of the key issues for government policy was that it was going to have to be "consistent on the path to net zero carbon emissions".
He said: "As we come out of this period, what regulatory interventions are there going to be to point the way? Will there be regulatory demands on fuel consumption? Will there be retrofit standards or other standards that point the way in which climate policy is going, which leads to innovation, which leads to investment?"