Incoming Bank of England governor Andrew Bailey must maintain Threadneedle Street’s concern with climate change after he takes over this month, more than 101 economists, scientists and industry leaders have said in a letter.
Signatories to the letter, organised by left-leaning research and campaign groups, include former UK chief scientific adviser Sir David King and former Bank rate-setter and Citigroup chief economist Willem Buiter.
The BoE has earned international plaudits for its approach to climate change under current governor Mark Carney, who has warned that the financial sector’s investments are currently not consistent with stopping global temperatures rising 2C.
Threadneedle Street is planning to carry out a climate stress test of the financial system in 2021, which will include a “catastrophic business-as-usual scenario”.
But today campaigners called on Bailey to make it mandatory for firms to disclose their climate risk “as soon as possible” as they raised fears the Bank is not acting fast enough.
The campaign and research groups, which include Positive Money, the New Economics Foundation and Greenpeace, also called for the Bank to exclude fossil fuel assets from future rounds of its bond buying programme.
However, the Bank has repeatedly made clear it will not use monetary policy to directly try to tackle climate change.
Instead, it focuses on issues such as reporting and stress testing in an effort to limit the financial instability caused by climate change.
Fran Boait, executive director of Positive Money, said: “Finance is currently funding warming of more than 4C, which represents an existential threat not only to finance and the economy, but to life on earth.”
“As the institution overseeing and underpinning our financial system, the Bank of England must lead the way and do everything it can to stop environmental breakdown being funded on its watch.”
The letter came just a week after Gina Miller, the lawyer famous for her anti-Brexit campaign, called for a review of Bailey’s appointment as governor of the Bank after his “toxic” tenure as head of the City watchdog.
Miller criticised the string of scandals during Bailey’s time as chief executive of the Financial Conduct Authority (FCA), such as the collapse of Neil Woodford’s fund empire and the London Capital & Finance minibond scandal.
Bailey will go in front of the Treasury Select Committee tomorrow, giving MPs the chance to ask about his role at the FCA and approach to climate change.