London, 8 June 2021 – Responding to the publication of the Bank of England’s climate stress test scenarios this morning, Positive Money senior economist David Barmes said:
“The Bank’s climate scenario analysis may be a useful exploratory exercise, but it’s time to move from exploring to acting. Scenario analysis is incapable of accurately measuring highly complex climate-related financial risks, and we already know enough about the dangers of the climate crisis to justify regulatory action now.
“It is concerning that the Bank of England appears to be ruling out using climate stress tests to help inform changes to capital requirements. Climate capital rules that reflect the high risk of fossil fuel investments are a necessary inevitability to ensure financial stability and alignment with the government’s climate plans, and the Bank needs to be introducing such policies without delay.
“By delaying the implementation of climate capital rules, the Bank is undermining its duty to protect financial stability and support net-zero.”
Positive Money is a research and campaign organisation working towards 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
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