Bluedot’s student reporter Cleo Carney speaks with Mark Carney. Mark Carney is the UN Special Envoy for Climate Action, Chair of Brookfield, a company, which is a prominent investor in green energy, and co-chair of the Glasgow Financial Alliance for Net Zero (or GFANZ), which is a coalition of distinguished financial institutions committed to expediting the net zero transition. Last but not least, he's my father. In 2021 he published Value(s): Building a Better World for All in which he makes a bold, urgent argument on the misplacement of value in financial markets and how we can and need to maximize value for the many, not few.
Cleo Carney
Hi guys, it's Cleo Carney and if you've been following along, you've seen that I've been talking to people who are working to counter climate change. And this next interview is particularly special, because it's my dad and his path to climate activism, which as you'll see isn't the typical path for someone who is working within this field.
Welcome, Mark, thank you so much for joining me.
Mark Carney
Thanks for having me, Cleo.
Cleo Carney
Mark Carney is the UN Special Envoy for Climate Action, Chair of Brookfield, a company which is a prominent investor in green energy, and co-chair of the Glasgow Financial Alliance for Net Zero (or GFANZ), which is a coalition of distinguished financial institutions committed to expediting the net zero transition. Last but not least, he's my father.
Mark Carney
First!
Cleo Carney
You worked in the finance sector for a long time, first at Goldman Sachs, then as a central banker, which is not the typical path for someone who works in the green sector.
For my first question, I was really intrigued about this, on both a personal level, but I thought other people will be interested to see sort of the reasoning behind his shift in career choice. Because so the moment when he really told the world that he cared about the climate sort of officially was in 2015, with his speech that he did at Lloyds of London, called “Breaking the Tragedy of the Horizon: Climate Change and Financial Stability.” And he didn't tell my mom or any of my family that we that he was going to be doing this speech and sort of making this proclamation. And I've always grown up in a very climate conscious household, particularly because that's something that my mom has always championed. So it was really interesting to see the reasoning why behind his sort of mindset shift and his realization, not that he was a staunch, anti-climate believer, very far from it, before it. But just his decision to move his career and his future path towards this.
When was the moment that you knew that fighting climate change was of the paramount importance?
Mark Carney
Well, it's interesting. So for a long time, Cleo, I thought of climate change as something that “they” would take care of. I was aware of it as an issue. I don't know who I thought “they” was, but I thought that eventually, the issue would be addressed by governments and companies and others. And I realized, really, the key point was when we were in the United Kingdom, and I was governor of the Bank of England, and one of the responsibilities of being governor of the Bank of England was to oversee the insurance sector. And in the UK, they have one of the biggest insurance sectors. And one of the big exposures for that insurance sector is all the natural disasters around the world. And what was happening is that those insurance companies were realizing, and I realized because they realized, that the number of natural disasters had more than tripled over the course of 25 years, and the costs of those disasters had gone up over five times. Now, that was just the cost of that which was covered by insurance, the actual cost was much bigger because these are smart companies, and so they would reduce the number of homes and businesses that they would cover. And it left a lot of people uninsured. So it was just a physical and financial representation that this risk was increasing very rapidly, and that someone needed to do something about it, and that “they” included me. My responsibilities as a regulator meant that the financial system needed to take the situation more seriously immediately.
Cleo Carney
And then for my second question, I wanted to find out because once he knew what he was trying to do, and that he was trying to help in the fight against climate change, I wanted to find out how he decided to choose what is now his niche within that. And that was seemingly quite natural for him because he could combine his economic background and his financial background with the knowledge that he was now gaining, and now everyone is gaining, about what is happening to the earth, the climate.
And after you decided that, when and why did you narrow your focus to sort of bridging the gap between the corporate and climate folks when you go work as an advisor at an insurance company?
Mark Carney
Right, that's good question. So, and a part of it was in your first question, because you said that in my previous career in private finance 30 years ago, it wasn't the usual staging point for someone to think about green issues. And that's true. But I realized, and others realize that the amount of investment, the amount of money that will be required to address climate change, is so enormous that all of the financial sector and, in fact, all companies need to be focused on climate change and what they're doing to help solve the problem when to some extent what they're doing today to cause the problem. So both a positive and an a negative aspect there. And so recognizing the scale of the issue, I worked with others, when I was a central banker to help put in place some very basic building blocks. There's a fellow called Mike Bloomberg, who was one of the leaders in this, others to put in place at the Paris Agreement seven years ago: basics of financial disclosure so that all companies and banks and insurance companies and others had to disclose how climate change affected them. First question, know the scale of the problem, and what your contribution is to it.
Cleo Carney
So measuring to allow you–
Mark Carney
–that which gets measured gets managed. Yes.
Cleo Carney
For the third question, I was also personally just quite intrigued to find out where he spends bits of his time because I see him working all the time. But I never know what it's for, what's that he's got calls all over the place, he's got to do many speeches for different companies. So and I also want to know the reasoning behind that, because presumably, what he's spending his most time on, he believes can make the most impact.
I'm sure I want to know, and I'm sure our listeners will be interested to know where you devote most of your time, and why. Because that's a very broad thing, my previous question. So how do you actually how do you actually allow the changes to come about?
Mark Carney
So our objective, you remember with the Glasgow Meeting of Climate, so all 190-195 countries coming together to try to address climate change. So in my role for the United Nations, as a special envoy, I worked with a bunch of those governments and those financial institutions to put in place elements of the financial system, I mentioned disclosure, there's lots of other tools and markets in the system that are being created, so that we have one goal, which is that every financial decision takes climate change into account. So every loan that's given out every investment that's made, the financial institution is sitting there and thinking, what's the impact on the climate? Does it make it better? Or does it make it worse? And if it's making it worse, what can we do to change it? So I spend most of my time on that. And that Glasgow Financial Alliance for Net Zero (GFANZ), which are most of the biggest banks, in fact, all of the biggest banks in the United States and around the world, big investors and others coming together, to think about how they can get money–investments and loans–to companies that are part of the solution, that are building renewable energy that are building electric vehicles that are coming up with new ways of, of producing food and other things that reduce the impact on the environment, or actually even better have a positive impact on the environment. And then the last thing you mentioned Brookfield, well, one of the things I do there, and they're enormous investor in green energy, all around the world, is really put these words into action. So I'm trying to work with others to build the system, John Kerry, who you met on Martha's Vineyard, there's a link here to Martha's Vineyard, he's leading this charge, so I work with him to change the system, but it's also good to do some direct thing, direct action, if you will. And that's what I do with Brookfield is to make sure that you know the solar farms are built, that the windmills get put up, that hydrogen energy moves forward.
Cleo Carney
Putting your money where your mouth is.
Mark Carney
Yeah, well, mainly other people's money. Something like that.
Cleo Carney
It's really important to have large corporations taking into account the climate risk as previously it's only been will this make me money? What are the risks there? What's the collateral but not taking into account the long term? Because as humans, we tend to be very short-term focused animals.
Mark Carney
That's right.
Cleo Carney
Which is not the wisest when it comes to climate.
And then for my fourth question, or for this question, I wanted to hear about some of the outcomes from GFANZ. Because I remember him putting it together, and he would tell me, “Oh, it's great. We've got this company on board, or I negotiated this,” and he was really happy about it. And so I wanted to see some of the positive attributes, as I've watched it grow from scratch, really, and it's amazing how things that can have such a positive impact can grow from scratch, and it can be an idea, and then suddenly you piece it together, you get people on board. And now you're making a tangible difference in the world. That is pretty interesting. At least to me.
Cleo Carney
I want to know what have some of the positive outcomes been of your GFANZ syndicate that you co-brokered and launched in April 2021. It's quite new, but seems like it has some outcomes.
Mark Carney
Some of the positive things for GFANZ first is that it came together and exists so that you have this mindset in the biggest banks and insurance companies, investors around the world. And to put numbers around it, we need a lot of money to address this issue. In fact, we need an additional two and a half to $3 trillion a year, every year for the next 25-30 years of investment in order to address climate change. Now, all of these banks and insurance companies, if you add up all the money that they have, it's about $140 trillion. So it starts to be enough if it's moved in the direction of addressing the issue. So the first thing is to have the commitment. But the second is to have a short-term strategy of how you're going to get behind climate change. And what GFANZ has done, and there was a recent meeting, the equivalent of the Paris meeting, the Glasgow meeting, was in Egypt a few months ago in a place called Sharm el Sheikh is the GFANZ members had shorter-term objectives for the next five years, and are starting to put in place the investments and loans for that to get behind. So there's about 300 of those objectives, which is important. And another thing they're doing, which is pretty crucial to other things, if I may, one is to provide all the information and the data so that everybody can judge which financial institutions are doing well, and which ones are falling behind. Because the people listening to this, they care about the issue, or watching us I guess as well, they care about the issue, but it's hard to get the right information, so we're putting that together. Last thing, hugely important, most or much of the investment that needs to happen is in the emerging and developing world. So in Sub Saharan Africa, in Asia, huge amount of investment needs to be put in place in order to, for example, shut down coal plants, and build up renewable and clean energy instead. So we're putting together with the governments in the United States and the United Kingdom and others huge financing packages in order to accelerate that process. And again, I mentioned John Kerry, he and I worked on some of those packages for Vietnam, for Indonesia, for Egypt, all of which had been announced in the last few months. And in all of those cases, the amount of emissions in those countries is going to be reduced by somewhere between 20 to 30%, over the course by the end of this decade. So those are big numbers. We need to do a lot more, but we're starting to build that track record and have those real impacts.
Cleo Carney
For this question. I wanted to see where he personally thought we should still be devoting some of our attention resources because there's been a lot of great progress, but there's still many, many places where we can improve. And there's a lot of chatter in the climate field. And it's hard to know who to trust and what to listen to, what's good and what isn't. But I really wanted to see what could continue to work.
And so would you say that the key, sort of, area of concern or area that still has ways to go within the fight against climate change that we need to invest more into lower income countries or countries that are very dependent on greenhouse gases to produce their revenue?
Mark Carney
Well, climate change is one of those issues where it's an “and.” So we need to, we absolutely need to do that. We won't address climate change unless we slow the pace of emissions increase in the big, particularly the big emerging economies. So, China, India, Indonesia, Vietnam, those countries. Now, they're also starting to invest much more rapidly, we need to speed that up. As well, closer to home, though, you know, we're here in Canada, we need to get emissions down by about 45% between now and the end of this decade. Huge investments are necessary here in order to accelerate. And, if you think about the contributions in the United States and elsewhere, it's really twofold. I think, part of it is getting these emissions down. But it's also coming up with new technologies. I mean, America is an amazing place in terms of coming up with new solutions. And one of the examples, I'll give two examples, one around hydrogen, which is, is going to be a very important source of clean energy, starting in about five years from now at at large scale. But also, in breakthrough technologies, such as fusion, where we saw announcements a few weeks ago, or breakthrough ways of taking carbon out of the atmosphere, because we'll need to do that as well. And there's natural solutions and others that help solve that. And companies like Stripe, and others are investing huge amounts of money to help accelerate that process.
Cleo Carney
I wanted to see for my final question about how we can piece all the knowledge that we are generating, and all of the awareness we have about what needs to be done into action. Like I mentioned in one of my earlier questions about GFANZ, which is more of a corporate agreement, that is engendering change, but action on a more governmental state of scale. So with global agreements, because a lot of them are signed. And these ones that are signed are very modified, as we know. They're not being followed through on I mean, currently, Canada, is not falling through a lot of these countries–we are making great steps change, but we need to do more. So how it can actually happen, and how we can actually ensure these things do occur, because they need to happen. We all know that.
I want to know, in your opinion, how do we, and this is a broad question, but your in opinion, how do we make change? How do global agreements translate into tangible change? And what can individual people, like the people watching, do to catalyze change?
Mark Carney
Well, I think it I think it starts with, you know, the people watching, individuals, because it's the force for change of individuals, whether it's through advocacy, or protest, or ways of living–what people want to consume, how they marshal their lives, and the change they demand of governments–that gets governments to do things like make agreements in Paris, or Glasgow, or Egypt, or beyond to come together, make agreements and say, “You know what? This is what the people we represent, this is what they value. They want climate change addressed. Now let's get together and address it.” And this sets up a dynamic, and this is what is happening, this is the positive thing that's happening, is there is a recognition that people want this addressed. They've had, you know, they've had enough, they've seen these storms, they understand the connection between human activity and climate change, and they want it addressed. And because companies and financial institutions realize that–after all, they're made up of people–but they also see where governments are going. They realize, those companies, those financial institutions realize, “Ah, if we can be part of the solution, not part of the problem. We're giving people what they want, and that has value.” And so part of my realization and all of this, 10 years ago when I realized the problem, was to recognize that the scale of investment is so large, we need the private sector as well as just governments. And this dynamic where people demand change, governments work in that direction. They're not perfect. They haven't done enough but they're working in that direction. And companies in the financial institutions that back those companies realize, “Ah, if we can be part of the solution, in the end, we're creating something of value and we'll still be around, we'll still be producing. And everybody is going to be happier.” And that's the way we turn something which was a vicious cycle, making things worse, into a virtuous cycle, making things better. And we're now just getting to that tipping point. And things like Bluedot, what you're doing other, you know, growing this awareness helps push these big institutions to do what they need to do.
Cleo Carney
Otherwise, they won't be around.
Mark Carney
Exactly. Yes. Now I'm going to turn it around. Okay. So you do a lot of healthy baking, right? Like healthy baking, I like it, you'r healthy baking, healthy cooking. How does that help these issues? Does it help these issues around climate change? What impact and was that part of the motivation?
Cleo Carney
So it's, there are a number of factors that kind of incorporate to why healthier baking is generally seen as better for the environment. But it's not always true. So if something is vegan, and a bunch of my recipes are vegan, then it's long been shown that, while it's more in a broad sense of a vegan diet. So, no one's really gonna be making a meat cookie. It's not such a broad difference between a vegan cookie and some cookie full of beef, to be horrific, but not using eggs, not using dairy–
Mark Carney
Dairy has to be a big–
Cleo Carney
Dairy has a big impact. Because–
Mark Carney
Although we like ice cream.
Cleo Carney
We do like ice cream. But, if you choose not to eat red meat, for example, that is wonderful for lowering greenhouse gas emissions. You still need the cows for the butter and the milk and the cream and the yogurt, and so lessening the use of animal products, which is really important in my recipes, and many of my recipes of substitutions for people who are vegan, is a key thing. Also, most of the ingredients I use are organic, which while pricier can definitely have a more beneficial impact on the environment, not only because other insects and creatures that are around the crop to use to, let's say, generate your wheat flour, if they're laden with pesticides, it can have really harmful effects for the insects that often these pesticides bioaccumulate. We saw that with the widespread use of DDT, which is different. But it's now companies that just created new pesticides that aren't DDT that still bioaccumulate and they also leach into the soil, which really affects and degrade soil health. And also, generally–
Mark Carney
Well, I was gonna say, I mean, one of the things around it, and this kind of goes back to our other conversation is, so if you have if you have an organic farm, or you're buying local produce and things, I mean, to the extent one can, you're more in touch with the rhythms of nature and the constraints, you know, the limits of our planet, and you conserve more you balance your diet more. And that's all part of this process of caring about your local environment, but caring about our global environment, if I can put it that way. And it helps to foster change. So it seems like just at a local level, but it's part of a bigger impact, a bigger movement.
Cleo Carney
Well, that's one of the things I love that most is the community and the farms. You can go to Morning Glory farm for all this fresh, delicious produce. So we didn't quite have same thing sometimes here when it's covered into now in Canada, but you can get wonderful things in the summer. And just really it is that: understanding on a more general sense, for your cooking, that cooking seasonally is so important because it shouldn't be that we can get everything all the time. We should have limits, we should have modesty, we should understand some things are for a particular season. And, it's completely fine if you want to get pineapple or whatever every once in a while, but just trying to go with the rhythm or the environment, supporting your local farmers, the local economy, and not shipping everything in all the way across the world. And, you know what, it just tastes better.
Mark Carney
Yes, it does taste better.
Cleo Carney
It tastes better. Often these foods are more nutritious for you because they're picked at peak ripeness. And it feels good to know that you're produce says made in Canada or made in Martha's Vineyard or made locally.
Mark Carney
Yeah. So this time of year though, when it's like, well, I'm looking outside and there's lots of snow out there. There's not a lot growing at the moment in Ottawa, so we have to have to do things like what?
Cleo Carney
Well, you can ferment things.
Mark Carney
Kimchi, for example. Yeah. Very important.
Cleo Carney
Kimchi, sauerkraut–
Mark Carney
Gut health improves in the winter, I guess, because of that.
Cleo Carney
Exactly. You can pickle things and you can freeze a lot of fresh surplus produce when it's summertime. So in the summertime, we often get a veg box, and you get quite a lot of produce in there. And there are different ways you can store them: freeze things, or even incorporate them into dishes and freeze them. And then you can do indoor growing, which I actually, very excitingly, received a mushroom growing kit for Christmas, indoor mushroom.
Mark Carney
Very important. We need a dark corner, right?
Cleo Carney
And you can try and get things that are locally, there'll be greenhouse grown, which is quite energy intensive. And they are working to improve that energy use for greenhouses and also do things like vertical farming. But you can try and just check your labels and see if it says for Canadians “Made in Canada,” when you're buying produce for Americans “Made in the US.” And a tip is actually to try and avoid, unless you live in California, produce–although it's very hard–that's made in California because they have, if you look at the San Joaquin Valley horrible soil degradation and the land has sunk. I can't remember exactly how many feet, but a shocking amount. Because the farmers have the right to tap as much water as they want from the underground aquifers. And because there are horrible droughts in California, which is devastating, they, the aquifers are shrinking and the land is sinking. So trying to get produce that, hopefully, isn't made in California just to lessen the load because California produces so many fruits and vegetables.
Mark Carney
That's right. That's right. They've made this amazing contribution. But we've all taken it for granted. So we we get produced from California even way up here in Canada, and really California and produce for people in California keep it under control. We live within our means and we move from there.
Cleo Carney
Fortunately, they are trying to improve water use techniques in reusable water.
Mark Carney
Very good. All right. Well, thank you, Cleo.
Cleo Carney
Thank you so much for listening to my interview with my dad. I hope you enjoyed it. I hope you learned something from it. I certainly did, even though I have him around to ask questions all the time. So thank you for listening and I hope you will watch my next interview which will be coming out not too shortly.
