Leading civil society groups have called for the UK’s financial regulators to be given a statutory objective to help meet the country’s climate commitments.
The proposal forms part of a response to a major Treasury review assessing the future of the UK financial services sector after Brexit. It has the backing of 37 charities and public interest groups including Greenpeace, ShareAction and the Finance Innovation Lab.
Jamie Audsley, head of future nature at RSPB, suggested the proposals were a chance to build on the successes of the Cop26 summit, at which addressing the implications of climate change for the financial system was a key focus.
“The review is a great opportunity to make the UK the world’s first net-zero financial centre and to align finance with the government’s climate goals, thereby achieving the chancellor’s vision of ‘rewiring the financial system for net zero’,” he said.
The Bank of England’s mandate has already been updated to reflect “the importance of environmental sustainability and the transition to net-zero”, which prompted the bank to overhaul its corporate bond purchase scheme with the aim of favouring more climate-friendly companies.
The Financial Conduct Authority and Prudential Regulation Committee, which supervise financial services firms, have also been asked to take into account the government’s net-zero goals. But the joint statement suggests that regulators’ current steps are insufficient, and warns the UK’s banks and investors are responsible for nearly double the country’s annual carbon emissions and have direct links to rainforest deforestation.
The signatories want the government to require regulators to take action to help achieve the UK’s emissions reduction targets and fulfil the Paris Agreement commitments.
The statement also calls on the Treasury to drop plans to give regulators a duty to promote the “international competitiveness” of the UK finance sector, suggesting that such a move would undermine regulators’ ability to act in the public interest.
This page was last updated February 7, 2022
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