According to this report from Positive Money, the Bank of England’s Covid Corporate Financing Facility (CCFF) is designed to provide the UK’s biggest corporations with billions of pounds in cheap loans without attaching social or environmental conditions. The result is that “many companies are benefiting from public money while simultaneously paying out dividends to shareholders, laying off workers, and harming the environment”.
The CCFF offers companies financing on terms similar to market rates prior to Covid-19 and is part of the BoE’s monetary policy response to economic disruption caused by the pandemic. The facility doubles the BoE’s corporate bond portfolio from £10 billion to £20 billion and companies with bonds eligible for purchase include Royal Dutch Shell, Total, BP and other companies in high-emission sectors.
The report makes five recommendations to improve the CCFF, calling on the BoE to impose conditions on participating companies that would restrict senior pay, dividends and layoffs. It also recommends mandatory climate-related financial disclosures and credible net-zero carbon pathways in line with the Paris agreement. The report also calls for clear consequences for failure to comply and for several measures to enhance CCFF transparency, including the publication of the total amounts borrowed by each company.
This page was last updated April 22, 2021
Share this article