Over 50 MPs and peers from across Britain’s main political
parties have written to the Bank of England governor, Andrew
Bailey, encouraging him to align UK finance with the government’s
climate goals.
The letter recommends that the Bank of England, as the public
institution tasked with overseeing Britain’s financial system,
uses the new green mandate given to it by the Treasury to help
steer billions of pounds of finance away from risky fossil fuel
investments and towards green, job-creating alternatives.
The signatories warn that climate change and biodiversity loss
are already jeopardising the Bank’s ability to meet its core
objectives, and urge Bailey to put its new green remit into
practice “in a manner commensurate with the scale and urgency of
the challenges we are facing”.
The letter remains open for parliamentarians to sign-on until
October, when a full list of signatories will be delivered to the
Bank of England.
, MP for Brighton Pavillion and one of the signatories
of the letter, said:
“UK banks are continuing to drive the climate emergency, with our
five biggest lenders pouring £227 billion into fossil fuels
between 2016 and 2020.
“After years of delay, it’s time for all of our public
institutions to play their part in getting the City of London in
order. That’s why, alongside nearly 50 MPs MPs and peers, I’m
calling on the Bank of England to step up its ambition before
COP26 and make sure the financial system is aligned with the UK’s
international climate commitments.
“Finance has been identified as a COP26 priority by the UK so we
need to get our own house in order. That starts with the Bank of
England setting out clear rules to penalise fossil fuel lending
and encourage the essential investment in sustainable
infrastructure and green jobs.”
Rachel Oliver, Head of Campaigns and Organising at research and
campaign group Positive Money, said:
“With all eyes on the UK ahead of the crucial COP26 talks, it’s
promising to see that a more ambitious approach to green finance
is gaining strong support across the political spectrum.
“To keep global warming within 1.5 degrees, all investment in new
fossil fuel projects must end this year. Yet the Bank of England
continues to let banks flood our economy with risky lending to
dirty energy. Unless the Bank of England sets finance on a new
path, we will keep heading towards environmental breakdown and
risk a new financial crash.
“We hope the Bank of England governor Andrew Bailey takes this
letter as impetus to rapidly accelerate efforts to green the
financial system, starting with rules to make it much harder for
banks to lend to fossil fuels.”
Notes
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The full letter is available here (and will be
regularly updated with new signatories): http://positivemoney.org/wp-content/uploads/2021/09/Green-finance-open-letter-to-Andrew-Bailey-1.pdf
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The recommendations are based on a New Economics
Foundation and Positive Money report, ‘Greening Finance to
Build Back Better’, June 2021: https://positivemoney.org/publications/greening-finance/
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The Bank of England’s latest climate disclosure report
revealed that the central bank’s asset purchases are funding
3C global heating – double the 1.5C target the UK government
is committed to via the Paris Agreement, 17 June 2021:
https://www.bankofengland.co.uk/prudential-regulation/publication/2021/june/climate-related-financial-disclosure-2020-21
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The biggest 5 UK banks have financed £227 billion
(US$315 billion) into fossil fuels since the signing of the
Paris Agreement in November 2015. Banking on climate chaos,
Fossil Fuel Finance Report 2021: https://www.ran.org/bankingonclimatechaos2021/
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UK finance is responsible for a total of 805 million
tonnes of greenhouse gases. That's 1.8 times more than the UK
as a whole emitted that year and more than the whole of
Germany (2019 data): Big Smoke,
Greenpeace/WWF: https://www.greenpeace.org.uk/resources/big-smoke-uk-finance-report/
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The International Energy Agency has warned that there
can be no new oil, gas or coal development if world is to
reach net zero by 2050, 17 May 2021: https://www.iea.org/reports/net-zero-by-2050
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In May 2021, the UN Secretary General Antonio Gutteres,
said: “There must be no new coal plants built after 2021...
Countries should also end all new fossil fuel exploration and
production, and shift fossil fuel subsidies into renewable
energy.”: https://www.un.org/sg/en/content/secretary-generals-statement-the-ipcc-working-group-1-report-the-physical-science-basis-of-the-sixth-assessment
