BoE urged to review UK exposure to high carbon investments
In an open letter to the Bank of England, a coalition of over 20 leading experts, investors, NGOs and universities have urged the Bank to investigate how Britain’s exposure to polluting and environmentally damaging investments might pose a systemic risk to the UK financial system and prospects for long-term economic growth.
The group, which includes Climate Change Capital, FairPensions, Lord Gummer, Zac Goldsmith MP, UK Sustainable Investment and Finance Association, Carbon Disclosure Project, WWF-UK, Greenpeace UK, The Climate Group, E3G, The Green Alliance, Oxford University’s Smith School of Enterprise and the Environment, Carbon Tracker Initiative, the London School of Economics, and Anglia Ruskin University’s Global Sustainability Institute wants the recently created Financial Policy Committee (FPC) at the Bank of England to work on these issues.
According to the letter, Britain’s collective financial exposure to high carbon and environmentally unsustainable investments could become a major problem as we approach environmental limits. As technology developments and policy rightly reduce returns in coal, oil, gas, mining and other high-carbon assets, while supporting low carbon ones, long term institutional investors – such as pension funds with 20 to 30 year investment horizons – may find that if they continue to invest in unsustainable areas they are left holding stranded assets with poor returns.
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