The below are remarks as prepared for Mike Bloomberg’s keynote during today’s High Level Conference for Financing Sustainable Growth
I want to thank you, President Juncker, and the European Commission for inviting me here this morning – and for all of the excellent work you are doing to reduce carbon emissions and improve public health.
Let me begin by congratulating the European Commission and Vice-President Dombrovskis on the launch of the Sustainable Finance Action Plan.
Capital markets are one of the most powerful tools we have in the fight against climate change – and one of the most overlooked. We have to do more to harness that power – and this plan is an important step forward.
It’s a great example of the leadership that the European Union is showing on climate change.
So is the work being led by President Macron of France, who you’ll be hearing from today.
I attended the One Planet Summit he hosted in December in Paris, along with many of you. Today is an opportunity to build on the global momentum that summit helped to create … particularly when it comes to sustainable finance.
I also want to thank Chancellor Merkel of Germany for making this issue a focus for the G20 in 2017 – and for helping to show how economic growth and fighting climate change go hand in hand.
International collaboration is the key to progress on climate change – and that is true of all the big challenges we face, from promoting public health, to creating jobs in a changing economy, to fighting terrorism.
That’s especially important to remember this morning, on the two-year anniversary of the tragic attacks here in Brussels that claimed so many innocent lives.
The U.S. stood firmly with you then – and in New York, we will never forget the outpouring of support we received from all across Europe, and around the world, after 9/11.
Today, the rising tide of isolationism on both sides of the Atlantic threatens our ability to confront terrorism …and many of the other common challenges we face, including trade.
I got in trouble for saying this, but when I was in London last year, I said that Brexit was the dumbest thing any country had ever done… and then we went and trumped it.
International organizations have a critical role to play in supporting global trade at a time when it is being undermined by tariffs and other misguided policies.
But the truth is, the headlines out of Washington do not reflect what is actually happening on the ground in states across the U.S.
The vast majority of U.S. business leaders seek closer alliances with our trading partners – and they are not waiting for Washington to make new trade deals.
Last September, we held the first Bloomberg Global Business Forum during UN General Assembly Week in New York. We were honored to have a number of European Commissioners join us, as well as President Macron. And we’re looking forward to hosting our second forum this September.
It’s an opportunity for business and government leaders to discuss potential investments… as well as common challenges that could benefit from private sector expertise and resources.
Climate change is a perfect example of that.
U.S. business leaders overwhelmingly support taking action on the issue.
If any CEO said climate change is a hoax, they would be fired – because companies can’t afford to ignore major risks.
Seventeen of the last 18 years have been the hottest in recorded history.
Oceans have risen more than 3 inches – around 8 centimeters – in the last 25 years.
The North Pole reached the freezing mark in February, 30 degrees Celsius above normal temperatures.
Northern forests are being decimated by Southern beetles that are migrating with warmer winters.
No industry can afford to ignore these and other changes.
If a company has a plant near the water, management can’t pretend that seas aren’t rising and storms aren’t getting worse.
Or if their supply chain could be interrupted by extreme weather… or if their production could be affected… they can’t ignore that either.
And the good news is: They aren’t.
Business leaders are taking action – and the vast majority of Americans want all levels of government to do the same.
Unfortunately, Washington is out of sync with the national zeitgeist – to borrow a word from our German friends.
But Washington matters much less than many people realize.
Under our federal system of government, most decisions that affect carbon emissions aren’t made in Washington. They are made by mayors, governors, CEOs, and citizens.
Over the past decade, Congress never passed a single major law to reduce emissions. The Obama administration’s largest climate initiative – the Clean Power Plan – was held up by the courts and never went into effect.
And yet, over that same time period, the U.S. reduced emissions by around 13 percent – more than any other major economy…
And that happened because of market forces that are beyond Washington’s reach… but also because of leadership by mayors, governors, CEOs, and communities.
If anything, the White House’s decision to withdraw from the Paris Climate Agreement has galvanized those groups to do more.
Our foundation has helped mobilize the groups into a new coalition, called America’s Pledge.
Collectively, we pledge to fulfill the U.S. commitment made in Paris – no matter what happens in Washington.
To give you a sense of the size of our coalition, if the groups who have signed up for America’s Pledge were a country, it would have the world’s third-largest economy – and larger than any nation outside of China and the overall U.S.
It’s roughly the size of Germany, France, the UK, and Belgium’s economies combined.
And just like every country that is party to the Paris agreement, America’s Pledge will formally report our progress to the UN each year, allowing the international community to hold us accountable.
In fact, I’m glad to say that UN Secretary-General Antonio Guterres has recognized our effort and accepted our first report, which we submitted at COP 23 in Bonn last year.
So, for all practical purposes, the American people remain committed to the Paris agreement, and we intend to fulfill our end of the bargain.
It’s important for the world to know that – and to know that we will continue to be your partner and work together to deliver on the Paris commitments.
One of our most important partnerships is the Global Covenant of Mayors for Climate and Energy, which is Co-Chaired by European Commission Vice President Sefcovic.
Through the Global Covenant, Bloomberg Philanthropies and the European Commission are supporting the kind of bottom-up local action on climate change that helped to make the Paris agreement possible.
The Covenant includes more than 7,500 cities, including 150 U.S. cities.
It’s the largest coalition of cities working together to fight climate change – but it’s hardly the only way cities are leading.
Last December in Paris, the Global Covenant launched a new partnership with the EU, the European Investment Bank and the European Bank for Reconstruction and Development to channel more private investment to cities’ climate work.
It includes a 1.5 billion euro fund to guarantee repayment of loans made to cities for climate projects, which makes them less risky and more attractive.
Risk is a major barrier in climate finance, particularly in developing countries, where only about 5 percent of cities have a credit rating.
The Global Covenant is working with the World Bank and other partners to fix that, by helping cities get their books in order.
For example: After the World Bank helped Lima, Peru get a credit rating, the city was able to borrow $130 million to invest in mass transit.
It’s a great example of how it’s possible to unleash more sustainable investment with very low up-front costs.
Today, the Global Covenant is issuing a call to public banks and private investors to help advance this work.
We aim to mobilize hundreds of millions of euros to provide more technical assistance to cities … reduce risks associated with climate projects by guaranteeing repayment to investors … and other measures that will drive more capital to cities.
These steps will help fund new infrastructure that reduces carbon emissions and air pollution…. which makes cities better places to live and work … which helps to attract further investment and create jobs.
It’s a virtuous cycle – and this effort will help to speed it up.
We’re also working to remove another major obstacle to private investment: better data.
For the most part, companies don’t have reliable information about how climate change will affect their holdings, their supply chains, and their customers – and investors don’t have information about which companies face the greatest risks.
And without good data, the market opportunities that climate change is creating are obscured.
This lack of information prevents companies from effectively allocating resources to protect themselves – and it prevents investors from driving capital to the companies that are taking action.
This is a market failure – but the good news is: it’s fixable.
Two years ago, the Financial Stability Board and its chair, Mark Carney, created a global task force aimed at bringing more transparency to the climate risks that companies face. Mark asked me to chair the group, and I was glad to accept.
Just last June, the task force released a set of voluntary recommendations to help companies disclose the risks they face – and how they are responding – in a more standardized way.
This way, investors can compare apples to apples – and more capital will flow to companies that are helping us fulfill the Paris Agreement.
The response has been very enthusiastic. So far more than 250 companies have endorsed the recommendations, and together they manage almost $90 trillion in assets.
At the One Planet Summit, we launched an online hub to help businesses report on and manage climate-risk – and to work together and share insights.
Our goal is to double the number of supporting companies by September – and we’re optimistic we’ll get there.
Just to give you an idea of how momentum is building behind the effort:
This morning I joined the heads of four new supporters: Belgium’s Finance Ministry, the Belgian securities regulator, Belgium’s central bank, and Euronext.
All of them endorsed the task force recommendations – and then we rang the Euronext opening bell together. So I guess you would call it a ringing endorsement.
Risk disclosure is a key piece of the European Commission’s new action plan – and that includes reviewing and strengthening existing guidelines to make them consistent with the recommendations made by our task force.
I think it’s fair to say: Climate risk disclosure is not a glamorous subject. It doesn’t get a lot of headlines – but it really will help us make a lot of headway.
So I want to thank the European Commission and Vice-President Dombrovskis for making it a focus.
Another U.S.– European partnership that holds great promise centers on the world’s largest source of carbon emissions: coal-fired power plants.
A number of European countries have made plans to go one hundred percent coal-free, which would be a great step forward in the fight against climate change – and we want to help them reach those goals.
In the U.S., since 2011, we’ve helped close or phase-out more than half of all coal plants – 268 out of 530.
And since the 2016 election, the rate of coal plant closures has accelerated, despite the federal government’s efforts to prop up the coal industry and roll back regulations aimed at protecting public health.
It’s another example of how headlines in Washington have little bearing on what is actually happening in the country.
According to one estimate, coal pollution kills nearly 20,000 people every year here in the EU – almost three times as many as in the U.S.
Our foundation is joining your fight here in Europe to help save more lives – which will also have a big impact on carbon emissions.
We’re off to a great start: Since the beginning of the year, three of the EU’s coal plants have closed, including one of the very worst polluters.
When it comes to climate change, we’re all in this together.
No single country – or international alliance – can tackle it alone.
The more we work together, the more progress we can make – and as we’re proving, we don’t need Congress or the White House to forge close partnerships.
Momentum really is growing – but we all know: We have to do more, faster, to confront this growing storm.
A few weeks ago I visited Cape Town, which is in the middle of a devastating drought.
Climate change makes droughts worse, by driving up temperatures, which means more demand for water … and faster evaporation from reservoirs.
There are many other cities around the world that face serious risk of water shortages, from Mexico City and Sao Paulo to Bangalore and Beijing.
Others have been battered by coastal storms … or flooded by swollen rivers.
So this really is urgent – and we don’t have a moment to waste. But I really am optimistic that we can meet the challenge.
The fact is: Beating climate change won’t require a miracle.
A big part of the climate puzzle comes down to fixing market failures so that markets better reflect the true financial costs of inaction — and the financial benefits of action.
Doing that won’t only help us avoid the worst impacts of climate change. It will also make the world healthier, and wealthier.
We’re making progress. We just need to do more of it, faster.
Today’s conference will help us continue making steps forward – so I want to again thank everyone at the European Commission for your leadership.