The G20 group of the world’s wealthiest nations have agreed for the first time to collectively sound the alarm over the threat to the financial system posed by the climate emergency.
Overcoming objections from Donald Trump’s US administration, G20 finance ministers and central bank governors meeting in Saudi Arabia over the weekend agreed to issue their first ever communique with references to climate change, according to reports from Reuters.
Sources told the news agency that the statement of priorities included the importance of examining the implications of global heating for financial stability, as part of the work of the G20’s Financial stability Board, the steering group for international banking industry rules.
The language represented a compromise to overcome opposition from US officials at the first major meeting of Saudi Arabia’s year-long presidency of the G20, according to the sources. An attempt to include references to the downside risks for global growth posed by the climate crisis was dropped.
Concerns about the economic damage from rising global temperatures and extreme weather events have risen up the agenda among world leaders, central bankers and financiers in recent years. The financial system continues to fund activities that are inconsistent with meeting climate targets, paving the way for trillions of pounds of financial losses in the future and catastrophic environmental consequences should the world economy fail to adapt.
The meetings in Riyadh were attended by Mark Carney, who has driven the climate emergency up the agenda among world leaders and financial regulators to stake a legacy at the Bank of England before he stands down as governor next month. The new chancellor, Rishi Sunak, stayed in London to continue preparing for next month’s budget, instead sending a senior civil servant from the Treasury.
Reuters reported that the communique issued at the end of the meetings in the oil-rich Gulf state would be the first to include references to climate change since the foundation in 1999 of the group of 19 leading industrial nations and the EU.
The International Monetary Fund included climate-related disasters in a list of the risks facing a highly fragile recovery in the global economy this year. However, the increasing focus comes as US officials resist naming global heating as an economic risk, following Trump’s move at the outset of his presidency to withdraw the world’s largest economy from the Paris climate accords.