Bank of England falls behind other central banks on climate action

London, 26th September 2024 - The Bank of England is slipping further behind G20 counterparts on action to green the financial system, according to the latest Green Central Banking Scorecard published today by think tank Positive Money.

Started in early 2021, the scorecard began as a means of kickstarting a “race to the top” on climate action between the world’s biggest central banks, and there have been significant movements in the rankings since then.

Originally in 4th place, the Bank of England fell to 5th place just before COP26 in late 2021 - the year the UK was hosting the conference - and failed to move from that spot in 2022. In the new 2024 edition of the scorecard, the UK has slid an additional two spots to 7th place. 

The authors attribute this fall to inaction from the Bank of England, which has been surpassed by China and Brazil’s central banks because both have taken greater strides to incorporate climate change into their policymaking since the last scorecard was published. 

Positive Money also points to improvements in the scorecard methodology which have strengthened the accuracy of scores in the new edition by better reflecting the impact of central banks and financial supervisors’ climate actions - separating those taking concrete action to green their operations from those neglecting their responsibility to do so. 

The downgraded ranking shouldn’t come as a surprise to the Bank of England, which was open about having “slimmed down” its green work in February, following former Chancellor Jeremy Hunt’s removal of climate change from a list of the Government’s priorities for the financial services sector in his remit letter to the Bank’s Financial Policy Committee last November. 

Other significant changes include Germany’s overtaking of Italy to secure second place, Brazil’s ascent into the top five, India breaking into the top ten, and the US falling to 17th place, ahead of only Turkey, Argentina and Saudi Arabia.

Positive Money’s Zack Livingstone, lead author of the report, said: 

“New Chancellor Rachel Reeves has pledged to make the UK a “clean energy superpower” by encouraging investment in green industry and technologies.  

“But unless the financial sector is given concrete targets to meet, this risks becoming an empty slogan, ringing as hollow as Rishi Sunak’s ambition to make the UK a “net zero financial centre” when he was Chancellor. 

“The Bank of England regulates the financial sector, and has the tools at its disposal it needs to divert the sector’s investments away from fossil fuels and towards clean and sustainable activity. If the Chancellor were to reinstate the Bank’s climate priorities in her remit letter this autumn, that would send a clear signal to policymakers there that they need to step up work to green the financial system.”

Notes

• View the new 2024 edition of the scorecard here (the page will go live a few minutes before the embargo is lifted): https://positivemoney.org/publications/green-central-banking-scorecard-2024  

• Bank of England governor Andrew Bailey told the House of Lords Economic Affairs Committee that the Bank had cut its climate work on 14th February 2024: https://greencentralbanking.com/2024/02/26/bank-of-england-trims-back-climate-change/ 

• Jeremy Hunt removed climate from his remit letter’s priorities in November 2023: https://www.ft.com/content/554043b3-a5a1-44d2-a360-5187e1523dc1 

• Rachel Reeves pledged to make the UK a “clean energy superpower” in early July: https://www.gov.uk/government/news/chancellor-unveils-a-new-era-for-economic-growth 

• Rishi Sunak said the UK would be the world’s first “net zero financial centre” in November 2021: https://www.gov.uk/government/news/chancellor-uk-will-be-the-worlds-first-net-zero-financial-centre 

• The first scorecard report was published in March 2021: https://positivemoney.org/publications/green-central-banking-scorecard/ 

• A updated scorecard ranking was published in October 2021, ahead of COP26: https://positivemoney.org/archive/bank-of-england-slips-behind-on-climate-ahead-of-cop26/ 

• The second report in the series was published in November 2022: https://positivemoney.org/publications/green-central-banking-scorecard-2022/ 

• Positive Money reviewed the Scorecard’s methodology in January 2024: https://positivemoney.org/publications/green-central-banking-scorecard-methodology-review/ 

• An interactive version of the scorecard is available here: https://greencentralbanking.com/scorecard/ 

• For more on banks’ financing of fossil fuels, see: RAN/Banktrack 2024 report: http://www.bankingonclimatechaos.org/ 

• For more information or to arrange a briefing/interview with a spokesperson, please contact press@positivemoney.org.uk or chloe.musto@positivemoney.org.uk 

About Positive Money

Positive Money is an international research and campaign organisation working to redesign our economic system for social justice and a liveable planet. 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 supporters. Find out more: www.positivemoney.org

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