Bank of England falling behind on climate leadership – Positive Money response

London, 11th December 2020

Below is comment from Positive Money on the Bank of England governor Andrew Bailey’s comments on climate change this morning at the Financial Stability Report press conference.

Simon Youel, Head of Policy and Advocacy at Positive Money, said:

“Andrew Bailey claims that there is no ‘lack of leadership’ on climate action at the Bank of England, but nine months after he promised to make greening the Bank’s corporate bond purchases ‘a priority’, we still haven’t seen the urgent reforms we need to catalyse a green transition. 

“Despite the governor’s claims that there is no existing standard for decarbonising asset purchases, other central banks are already showing the Bank of England how it can be done. Bailey need only look to Sweden’s Riskbank, who have already announced measures to exclude bonds from companies in breach of international norms on sustainability. Meanwhile the Bank of England still seems to be shying away from commitments to divest from even the worst polluters.

“The Bank of England is falling behind on climate, and needs to show global leadership in this field ahead of the UK hosting COP26.”

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Notes

1. Financial Stability Report Press Conference Live Stream, 11th December 2020: https://www.youtube.com/watch?v=2La-aiL9Ncw&feature=emb_title

2. [49:27 at link above]: Andrew Bailey said: “we have already said that the work is underway, you know, has got going on the question of the bond portfolio we hold. We are doing that work. But let me emphasise, it’s not a straightforward decision. I mean, some people seem to think that A) there’s a sort of standard out there that we can sort of pick off the shelf and put into effect, B) that we will then dump a load of bonds into the market and buy a load of other bonds, and frankly that standard doesn’t exist.” He added: “What we do must incentivise climate change, it’s not a matter of sort of drawing a sort of binary divide today and saying well, you’re good and you’re bad, you know, you’re saved and you’re damned, it’s a matter of incentivising the change we want to see.”

3. Andrew Bailey was responding to a question about a hoax Bank of England climate announcement from the activist stunt duo the “Yes Men” earlier in the week. See: https://theyesmen.org/project/boe/reveal 

4. A letter from 125 experts (including Yanis Varoufakis, Stephanie Kelton and William Buiter) called on the Bank to do more on climate change, 16 November 2020: https://positivemoney.org/2020/11/sunaks-green-finance-plans-come-under-fire-from-experts-press-release/ [see Guardian coverage here: https://www.theguardian.com/business/2020/nov/16/bank-of-england-needs-more-powers-to-decarbonise-economy-say-experts]

5. “The Riksbank when purchasing corporate bonds, with effect from January 2021, shall only offer to purchase bonds issued by companies deemed to comply with international standards and norms for sustainability”. 25 November 2020, Page 5: https://www.riksbank.se/globalassets/media/rapporter/ppr/engelska/2020/201126/annex-to-the-minutes-b-programme-for-the-riksbanks-asset-purchases-for-monetary-policy-purposes-in-2021.pdf 

6. Positive Money campaigns for a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of over 65,000 supporters. https://positivemoney.org/ 

7. For more information or to arrange a briefing/interview with a spokesperson please contact press@positivemoney.org.uk or Simon Youel on 07817765517