Sunak urged to stop bankers fuelling climate crisis in Budget

London, 24 February 2021

Rishi Sunak should use his upcoming Budget to enable the Bank of England to shift billions of pounds away from fossil fuels and towards a green recovery, tens of thousands of people told the Chancellor today.

A petition organised by campaign groups Positive Money, SumOfUs and 350.org, and signed by nearly 65,000 members of the public, delivered to Rishi Sunak today urges the Chancellor to make sure the Bank of England and the banks it regulates stop funding the climate crisis.

Sunak is expected to make highly anticipated updates to the Bank of England’s mandate to include a greater focus on climate, alongside next week’s Budget. It is currently unclear exactly what this mandate change will look like, but campaigners are calling for the new wording to ensure that the Bank of England:

• Get its own house in order: The Bank of England stops subsidising the dirtiest sectors of the economy through its policies, such as its £20bn corporate bond purchase scheme, which is currently aligned with 3.5C warming, and involves the Bank buying debt issued by the likes of Shell and BP

• Stops the banks it regulates fuelling climate breakdown: The Bank of England uses its regulatory toolkit to prevent UK banks pouring billions of pounds into risky fossil fuel projects

• Provide more funding for green alternatives: The Bank of England works with the Treasury to instead support investment in sustainable job-creating projects, by helping to fund a National Infrastructure Bank, and introducing green incentives to its Term Funding Scheme, which provides cheaper funding to lenders

The petition echoes a letter Sunak received from 125 leading experts in November, which outlined three key changes to existing Bank of England schemes to allow Britain’s central bank to support a fairer and greener recovery from the Covid crisis.

As the institution tasked with overseeing Britain’s financial system, the Bank of England has a critical role to play in ensuring hundreds of billions of pounds are shifted away from fossil fuels and channeled into the green transition. But Britain’s central bank is currently falling behind its counterparts in other countries, such as Switzerland and Sweden, which have started excluding unsustainable assets from their market-shaping monetary policy operations.

The news comes after MPs on the Conservative-led Environmental Audit Committee (EAC) last week called for the government to add climate and nature objectives to the Bank of England’s mandate, to enable the Bank to take steps to align its high-carbon corporate bond purchase scheme with the Paris Agreement’s 1.5C target ahead of COP26.

Hannah Dewhirst, Positive Money campaigner said:

“The Bank of England and the financial system it regulates is currently funding catastrophic climate breakdown, which will once again see ordinary people in Britain and across the world paying the price of bankers’ recklessness. The amount of money British banks have poured into dirty energy since the Paris Agreement in 2015 would be enough to power every UK home with renewables three times over.

“Rishi Sunak has a huge opportunity in this Budget to make the Bank of England get its act together. By stopping billions flowing to dirty fossil fuels and investing in green job-creating projects instead, we can ensure Britain is leading by example ahead of the critical COP26 climate summit in Glasgow this November.”

Anna Vickerstaff, 350.org campaigner said:

“British banks are the worst in Europe for funding fossil fuels, with Barclays and HSBC alone pouring more than £145bn into dirty energy projects since the UK signed the Paris Agreement in 2015. Banks operating in the UK are fuelling the climate crisis by financing fossil fuel projects from Argentina to Mozambique, projects that trample on indigenous rights, destroy livelihoods and irreparably damage communities.

“The Bank of England must cut the flow of finance to fossil fuels and channel funds towards rebuilding an economy that works for people, not polluters. This means strengthening the health and care sector, delivering a bold and ambitious programme of investment to tackle inequality, and guaranteeing a clean environment as a basic human right.”

Eoin Dubsky, SumOfUs campaigner said:

“As the body overseeing our money and banking system, Britain’s central bank has a crucial role to play in ensuring we are able to finance a fair green recovery from this crisis. The Bank of England and the banks it regulates are funding catastrophic global heating of more than 3.5C, far higher than the upper-safe limit of 1.5C that the UK is committed to targeting through the Paris Agreement.

“If the UK’s leadership is going to be taken seriously, Sunak needs to make sure the Bank of England is getting our own house in order ahead of the COP26 climate summit we are hosting this November.”

Notes

1. The petition can be viewed here: https://actions.sumofus.org/a/bank-of-england-stop-funding-climate-chaos

2. More details of the EAC’s recommendations here: https://positivemoney.org/2021/02/cross-party-report-urges-green-recovery-from-covid/

3. More details of the November open letter here: https://positivemoney.org/2021/02/cross-party-report-urges-green-recovery-from-covid/ As covered in The Guardian here: https://www.theguardian.com/business/2020/nov/16/bank-of-england-needs-more-powers-to-decarbonise-economy-say-experts

4. Positive Money and SumOfUs crowdfunded a front page advert in Rishi Sunak’s local paper calling on him to stop bankers flooding Britain: https://positivemoney.org/2021/02/surprise-for-sunak-60000-demand-climate-action-on-frontpage-of-his-local-paper/

5. UK banks are the worst in Europe for fossil fuels, pouring around £150bn into dirty energy between 2016 and 2019: https://www.ran.org/bankingonclimatechange2020/

6. It is estimated that every UK home could be powered by offshore wind for £50bn: https://auroraer.com/media/reaching-40gw-offshore-wind/

7. The Bank of England’s own climate disclosure in 2020 found that its corporate bond purchases were aligned with global temperature rises of 3.5c by the end of the century: https://www.bankofengland.co.uk/-/media/boe/files/annual-report/2020/climate-related-financial-disclosure-report-2019-20.pdf?la=en&hash=5DA959C54540287A2E90C823807E089055E6721B

8. The Swiss National Bank announced in January that it will exclude coal companies from its monetary policy portfolios: https://www.snb.ch/en/mmr/speeches/id/ref_20201217_tjn/source/ref_20201217_tjn.en.pdf

9. “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

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

About Positive Money 

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. www.positivemoney.org

About SumOfUs

SumOfUS is an advocacy nonprofit organization and online community with nearly 17 million members worldwide. We combine and amplify consumers’ voices to make sure regulators and corporations around the world hear them. Together, our community of millions act as a global consumer watchdog – running and winning campaigns to hold the biggest companies in the world accountable.

About 350

350.org is building a global grassroots movement to solve the climate crisis. Our online campaigns, grassroots organising, and mass public actions are led from the bottom up by thousands of volunteer organisers in over 188 countries. We’re an international movement of ordinary people working to end the age of fossil fuels and build a world of community-led renewable energy for all.

-ends-

###