05 April 2016
The historic Paris climate change agreement has underlined what is arguably the biggest challenge faced by financial markets in a generation.
How to respond to the threats and opportunities posed by climate change? And how to reallocate assets to reflect the sweeping and disruptive changes that the shift to a low-carbon economy will entail?
As our ninth annual Deals of the Year awards demonstrate, the response from the financial community is already well underway. There was a truly strong crop of contenders to choose from this year.
Take the Personality of the Year award, for example. There were dozens of leaders who have been at the forefront of addressing the challenges outlined above – too many to mention in this editorial.
Also in the running was Thomas DiNapoli, New York State Comptroller, who announced at the Paris climate summit that the state's retirement fund was putting $2 billion into a low-carbon fund. He has since continued to take a strong stance, wading into the shareholder resolution at ExxonMobil.
Or AXA CEO Henri de Castries, who in May helped the Paris climate summit gain momentum when he announced a divestment of about 500 million of coal assets and a trebling of low-carbon energy investments by 2020.
Under the leadership of Yngve Slyngstad, Norges Bank Investment Management, the manager of Norway's $850 billion sovereign wealth fund, has also taken strides to address these issues through coal divestment (although this was mandated by Parliament), and by helping to push the case for clean infrastructure investment and integrating sustainability considerations into the investment process.
Then there is Helen Wildsmith, who has helped lead the 'Aiming for A' initiative, which had some noteworthy successes on climate disclosure at BP and Shell last year. This year, it has already made made progress engaging with the mining sector.
There are also the leaders behind the Portfolio Decarbonisation Coalition or the Montreal Carbon Pledge, both of which have attracted greater-than expected assets.
Meanwhile, the Personality award could easily have gone to UN climate chief Christiana Figueres, whose relentless positivity was integral in securing a deal in Paris.
And we haven't yet mentioned the many protagonists who have helped the green bond market continue to grow and evolve. Again, there are too many to name.
In the end, Mark Carney scooped the award because of the influence he has had on helping the financial markets wake up to the long-term risks posed by climate or "the tragedy of the horizon", as he so eloquently put it.
And his Task Force on Climate-Related Financial Disclosure has the potential to be a game changer for investors who are currently forced to wade through a quagmire of confusing data.
The other awards in the Deals of the Year sector were equally hotly contested. It is all evidence of the fact that investors are starting to shift their capital into climatealigned themes. This is a trend that will continue, and no one will want to be left behind.