The Labour party is considering measures to crack down on firms which invest in fossil fuels which include making the Bank of England (BoE) change its policy operations to avoid carbon bias.
In an announcement which has raised concerns about “skewing” the BoE’s focus, Labour said it was also considering forcing banks to publish the climate-related risks associated with their financial assets.
Citing a report commissioned by shadow chancellor John McDonnell, Labour pointed to findings that UK banks’ fossil fuel financing during the period 2016-2018 was more than $100bn (£77bn).
The report also claimed financial institutions allowed so-called high-carbon firms to access the stock market at a low cost.
McDonnell, said: “It’s clear there is a long way to go before the finance sector is pulling its weight to achieve the rapid changes our economy needs to meet our climate obligations.”
He added that Labour would consider the findings as it prepared for the upcoming General Election.
A spokesperson for lobby group the Institute of Directors said: “Encouraging firms to grapple with climate risks and their own environmental impact is a reasonable goal.
“That said, skewing the Bank of England’s focus always risks muddying its crucial task of ensuring monetary stability.”
A spokesperson for the Investment Association said: “The report raises many important points about the role of investment in addressing climate change.
“Investment managers want better disclosures on the impact of climate change on companies, so investors know the risk their investments face.
“Where climate change could have a big impact on the long term value of a company, investment managers are engaging with them to ensure they are responding to the risks.”
In September, Bill Gates poured cold water on climate activists’ attempts to lobby investors to abandon fossil fuel stocks. The billionaire tech tycoon-turned-philanthropist said it would be more worthwhile to urge investors to back emerging technology that helps cut carbon emissions.
Gates said: “Divestment, to date, probably has reduced about zero tonnes of emissions. It’s not like you’ve capital-starved [the] people making steel and gasoline.”
“I don’t know the mechanism of action where divestment [keeps] emissions [from] going up every year. I’m just too damn numeric.”
(Main image: Getty)