Mark Carney will lead a team at Brookfield Asset Management focused on investing in positive environmental, social and governance changes, the alternative asset manager said Wednesday.
The former governor of the Bank of Canada and Bank of England will join the firm as vice-chair and head of ESG and impact fund investing.
Brookfield said Carney, currently the United Nations special envoy for climate action and finance, brings a wealth of knowledge and expertise to the role.
Carney has long been an advocate calling for action on climate change, and said in a statement that he sees climate sustainability as “one of the greatest commercial opportunities of our time.”
In his new role, he will spearhead an increasingly popular form of investing, focused on ESG – environmental, social and governance issues – as well as investments that yield both social and financial “impacts” or returns.
“Building on our track record in renewable investing, Mark will help accelerate our efforts to combine better long-term outcomes for society with strong risk-adjusted returns,” Brookfield chief executive Bruce Flatt said in a statement.
“Mark's insights and perspectives will add tremendous value to our global investing activities for the benefit of our investors.”
Carney, long floated as a potential Liberal party candidate, was reportedly advising the prime minister on the post-pandemic economic recovery.
Former ambassador and New Brunswick premier Frank McKenna, who now chairs Brookfield's board, said that the move to Brookfield fits with a view Carney has long espoused: that the way to make a dramatic impact on climate change is to "harness" market forces.
Writing for an International Monetary Fund publication last year, Carney called for an overhaul of the financial system, saying "sustainable investing must go mainstream."
"A new, sustainable financial system is under construction. It is funding the initiatives and innovations of the private sector and amplifying the effectiveness of governments' climate policies," Carney wrote.
"Unfortunately, like virtually everything about the response to climate change, this new sustainable financial system is not developing fast enough."
A report from the Global Sustainable Investment Alliance suggests that more than half of Canadian assets under professional management fall under "responsible investing," and that the assets in Canada managed with at least one "responsible investing strategy" grew by 42 per cent to $2.1 trillion at the start of 2018, up from $1.5 trillion at the start of 2016.
Brookfield has approximately US$550 billion of assets under management.
McKenna said Brookfield provides a platform for Carney's credibility and star power, adding that Carney has the necessary "wattage" to attract and retain large amounts of money to Canada from sovereign wealth funds and other international investors.
"I would call this marriage, really, serendipity: We've got a highly respected Canadian global leader in Mark Carney, joining forces with a Canadian-based alternative asset manager that is now one of the world's largest," McKenna said.
"I really believe that he is in a unique position to help ... enterprises all across the planet to understand how they need to look at social and environmental issues hand-in-hand with return on investment."