MONTREAL — A decade after Prime Minister Mark Carney delivered a famous speech about the financial risks associated with climate change, global organizations called for financial system reforms in an open letter on Monday.
The letter signed by Canadian, European, and American environmental groups calls for urgent changes, noting that a decade on, inaction is the overarching theme.
“This is the decade of consequence. The next 10 years must look much different than the last,” the letter reads.
Carney made the remarks on Sept. 29, 2015 in his role as Bank of England governor, just a few weeks before COP21 opened in Paris.
Carney warned the world’s leading financiers in a speech at Lloyds of London that financial mechanisms needed to be put in place to avoid what he termed the tragedy of the horizon.
He used the expression to refer to the idea that climate change is an existential threat to the financial system, but that the damage will be felt more in the long term, while, paradoxically, politicians and private decision-makers are mainly guided by short-term considerations.
“In other words, once climate change becomes a defining issue for financial stability, it may already be too late,” Carney explained in the famous speech.
He then identified three types of global financial risks.
Firstly, there are physical risks from the financial impact of natural disasters. Then there are legal risks, such as victims of climate change seeking compensation from major emitters and insurers. And lastly, there are also transition risks, such as the loss of value of fossil fuel-related assets.
According to Eddy Pérez, a former international relations adviser to Steven Guilbeault in his previous role as environment minister, Carney’s speech “changed the way we talk about climate change.” It also made it possible to conceive of the Paris Agreement not only as an environmental treaty, but also as a financial one, Perez said.
To remedy the “tragedy of horizons,” Carney recommended that major banks integrate climate crisis risks into their investments.
“After that speech, countries such as France pushed for the creation of climate risk disclosure programs in major forums, such as the G20,” recalled Pérez, who now teaches at the Université de Montréal.
The 10 years following this speech and the signing of the Paris Agreement saw the emergence of a series of initiatives aimed at decarbonizing the financial assets of major financial institutions.
For example, by spearheading the launch of the Net-Zero Banking Alliance, Carney succeeded in convincing the world’s largest financial institutions to commit to aligning their investments with the Paris Agreement.
But since Donald Trump’s return as president of the United States, many major banks have left this alliance.
Last January, all of Canada’s biggest banks left the UN-backed alliance that aims to accelerate climate action among financial institutions. Banks including RBC, Scotiabank, BMO, National Bank, TD Bank Group and CIBC said they were no longer members, and said they would go it alone to achieve net-zero emissions.
Their departure followed on the six largest banks in the U.S. leaving the alliance ahead of Trump’s presidential inauguration.
“We are seeing setbacks. Ten years on, climate action is facing significant geopolitical challenges,” said Pérez.
It is against this backdrop of climate disengagement that some 50 organizations, including Environmental Defence Canada, issued a call to action on Monday.
“Ten years ago, the financial sector was warned. It listened, but it did not act decisively. Today, the risks are higher, the stakes greater, and the time shorter,” the organizations wrote in the open letter entitled “A call for global financial reform.”
“The horizon is no longer theoretical. The financial system is facing instability and potential collapse.”
Organizations such as the Union of Concerned Scientists, Investors for Paris Compliance, and Climate Action Network have signed the letter and are calling on world leaders and major financial institutions to comply with the Paris Climate Agreement.
They also call on banks to “exclude support for new coal, oil, and gas projects.”
According to Julie Segal, climate finance manager at Environmental Defence Canada, a signatory to the letter, the Canadian financial system is “scandalously ill-prepared for climate change.”
Segal was a member of the advisory committee for Bill S-243, which died on the order paper and was intended to require banking institutions to develop climate change action plans aligned with the targets of the Paris Agreement.
Segal recalled that in May 2024, several months before he became prime minister, Mark Carney testified before the Senate committee studying Bill S-243. He stated at the time that “Canada is lagging behind its international peers” in terms of climate finance policy.
“Our Prime Minister has expertise on the subject of sustainable finance and is well aware of the risks to the Canadian economy of falling behind,” Segal said. “So we are asking Mark Carney to take action.”
Segal said that includes requiring financial players to publish climate transition plans aligned with the Paris Agreement targets, noting that Canadian banks are among the largest investors in the fossil fuel sector worldwide.
According to a recent report by BloombergNEF, Canada’s major banks financed approximately US$145 billion (more than C$202 billion) in fossil fuel investments last year, compared with US$75 billion (more than C$104 billion) in low-carbon energy.
This report by The Canadian Press was first published Sept. 29, 2025.
Stéphane Blais, The Canadian Press
