The Bank of England has been called on to “re-prioritise” aligning the financial sector with the government’s climate goals, by more than 50 leading economists and eco-economy leaders.
In a letter to the Bank of England governor Andrew Bailey, the group says it is “extremely disappointed” that the bank has reduced its resourcing of climate change work and warns the UK is in danger of lagging behind other countries in supporting the shift to a low-carbon economy.
Published by think tank Positive Money, it calls for the bank to step up its work to align the financial sector with broader government climate goals as a matter of urgency.
It comes in the wake of chancellor Jeremy Hunt removing climate change from a list of four key government policy priorities, the green economy being overlooked in the “botched” budget, and the Bank of England’s announcement that it will be reducing resourcing on climate change work.
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The letter states: “Despite the Bank of England emerging as an early climate leader, over the past four years we have seen other major central banks outpace the Bank of England on this agenda.
“Major central banks have now begun adjusting collateral frameworks and capital requirements to reflect climate risks, and momentum is building towards the use of green-term funding schemes to incentivise green lending.
It added: “Despite climate-related financial-risk disclosure initiatives now being widespread, the UK financial sector continues to underprice climate risks, and finance emissions and nature-destruction at a pace and scale that posits a risk to global financial and monetary stability, as well as global climate goals.”
It adds: “We therefore urge you to re-prioritise work to align the financial sector with the government’s climate goals, reverse resource cuts for this work, and reassert the Bank of England as a climate leader as a matter of urgency.
Signatories of the letter include economists Ann Pettifor and Jason Hickel, former IPCC lead author and ecological economist Julia Steinberger, author and former chair of the UK Sustainable Development Commission Jonathon Porritt, as well as leading civil society organisations including Green Alliance, WWF and the New Economics Foundation, and industry coalition Bankers for Net Zero.
Earlier this year, National Infrastructure Commission chair Sir John Armitt told chancellor Jeremy Hunt that the government needs to “move faster” on decarbonisation measures.
