The financial consequences of climate change are becoming increasingly apparent. Extreme weather is already causing billions of pounds of damages, not in the future, not tomorrow, but now. The numbers are increasing but they still mask the trillions at risk if the low carbon transition occurs abruptly. The situation demands prudent, thoughtful, and urgent action. But time is running out.
The transition will be a monumental undertaking. It will be the single greatest social and economic transformation in human history. In the UK alone, every sector of the economy must evolve. From construction, to manufacturing, to transport, to services, we all have a role to play to realise a net zero future.
Finance is being called to serve. The transition demands an immense reallocation of capital. And that reallocation demands a new kind of finance - green finance, which prices environmental risk into decisions taken by banks, by investors, and ultimately, by individuals. This new way of thinking will reset incentives across the economy and empower individuals to finance the sustainable future they are asking for It will ensure we look beyond the risks, to the opportunity the future presents.
It is to capitalise on this opportunity that we have launched the Green Finance Institute.
The Green Finance Institute will operate at the interface of the public and private sector. The scale of the low carbon transition demands that finance must work closely with policymakers, and with businesses. We must all come together to mobilise capital to accelerate the domestic and global transition to a zero-carbon and climate-resilient future.
Over the coming months, the Green Finance Institute will begin to scale its efforts to transform the financial system and the wider economy. We are just getting started. But there has never been a better time to engage in the green agenda.
I believe that together, we can rise to the challenge. The course to a prosperous and sustainable future will require new ways of thinking, and new ways of doing. But above all, it will require finance to do what it has always done, ensure capital goes where it is needed most. Once it was to the factories and furnaces that birthed the Industrial Revolution. Now it is still more existential - our low carbon, sustainable future.