Europe has a carbon trading scheme, as does California. Britain is launching its own, smaller, UK Allowance scheme today. Teething problems during initial trading and incompatibility of these schemes are inevitable – but so is the direction of travel.

We are on a path towards a new planetary commodity: carbon pricing or some similar scheme is likely to be the most fundamental commodity price determining the direction of markets – the 21st century Brent crude. Earth’s financial markets face a choice between carbon as the key determinator of inflation, interest rates and prosperity… or rising global temperatures being the ultimate metric instead.

Carbon pricing isn’t global yet, but the consequences are. Policymakers as diverse as Joe Biden, the Communist Party of China and Boris Johnson all appear to agree – regardless of their ideology – that any vision of the future depends on a stable climate. Even the old voice of oil, the International Energy Association (IEA), has called for an end to new fossil fuel exploration, starting right now in 2021.

Momentum is building and leading one way: to COP 26 in November and climate diplomacy.

Pressure of this type means going net-zero is not just needed to meet asset owner requirements; in the long run it could mean the difference between investing successfully and holding stranded assets.

Yet it’s also a challenge of communication. Any financial firm that fails to outline its own plan will inevitably be tarred as a carbon laggard. Clients need to understand and believe in the journey their portfolios are on towards a zero-carbon future.

Measurement is important, and industry initiatives such as the Taskforce on Climate-related Financial Disclosures (TCFD) are starting to make this a little easier. However, this alone is not enough. Because the world is not yet zero-carbon, measurement of the current situation is just the beginning.

That’s why carbon diplomacy has become everyone’s job. It means negotiating and improving the reality, but also telling a convincing and true story about the direction of travel and intent of your team.