When it comes to climate change, achieving the aim of the 2015 Paris Agreement – keeping 21st century global temperature rises below two degrees – will require coordination between government, business, civil society, individual citizens and, crucially, the financial sector.

The sector is already turning to green finance opportunities, and not just because they are the right thing to do but because they are increasingly profitable. James Kynge at the Financial Times reported that ethical investments have begun to deliver greater returns than their more traditional rivals, with four environmentally-focused FTSE Russell indices all outperforming their benchmark, the FTSE Global All Cap Index².

Yet more fundamental action is still required. In its recent report, the EU’s High Level Expert Group (HLEG) on sustainable finance estimated an additional €180bn a year is needed in Europe alone to meet the Paris targets³. If that gap is to be filled, the HLEG stresses the need for a culture shift away from short-term thinking and towards a much longer-term horizon. As banks, we can and must play a dual role in that process: embedding long-term thinking in our own organisations, and encouraging it in the businesses in which we invest and the projects we finance.

At BNY Mellon, we are committed to doing just that. In 2016, we managed $69.3bn in assets screened for Economic, Social and Governance (ESG) and values-based criteria, and maintained an overall carbon-neutral status – leading to BNY Mellon being included on the Dow Jones Sustainability World Index in 2017, for the fourth year running.

However, the market cannot deliver sustainability goals on its own. Governments and regulators must play their part. There are several actions that they can take, including looking again at capital requirements to ensure that as well as ensuring financial stability they are also incentivising sustainable investment. In relation to Brexit, two tasks in particular stand out.

The first is to provide a level playing field. Regulators need to be wary of establishing an environment in which banks’ sustainability objectives are pitted against commercial incentives. The HLEG report recommends establishing an agreed taxonomy of terms which everyone can use, which we at BNY Mellon would support. That way, when one institution declares an investment to be “green” or “sustainable”, and potentially benefits from regulatory incentives for doing so, the whole sector can be confident as to what that means.

Secondly, we need stability. As the European Banking Federation has put it, “the clarity and stability of the regulatory environment and public policies are essential for banks to engage in long-term business models and decision-making”⁴. If the market needs to look beyond short-term profit horizons, then policymakers also need to look beyond traditional four- or five-year political cycles.

Brexit does not necessarily contradict those objectives, but it certainly complicates them and potentially puts them at risk. The financial sector is already taking its sustainable finance responsibilities seriously. Green bond issuance, for example, reached $155bn in 2017, an increase of 78% in just a single year⁵. BNY Mellon’s Corporate Trust alone administered 21 green bonds totalling $15.4bn. We need assurances from both the EU and the UK negotiating teams that such efforts are not going to be undermined by the Brexit process.

At its heart, Brexit involves taking one regulatory jurisdiction and creating two in its place. As that happens, some degree of divergence is perhaps inevitable. Yet if it goes too far – if it means a different approach to sustainable finance in the UK to that in the EU, or if it means enormous regulatory upheaval at the very moment that banks are being asked to reorient their business models towards longer-term objectives – then sustainable finance ambitions could be jeopardised.

Time is of the essence. Climate change is a long-term challenge that requires immediate action. As a recent report puts it: if world temperatures are not falling by 2020, then the Paris goals become almost unattainable⁶. That is effectively the same timeframe that the EU and UK have set themselves to negotiate the terms of their new relationship.

If Mr Gove is to achieve his ambition of a “Green Brexit”, then the negotiating teams need to ensure that those negotiations do not run contrary to the actions needed for a genuinely sustainable future.