The Bank of England has fallen further behind its G20 counterparts in greening the financial system, according to the latest Green Central Banking Scorecard, published by Positive Money.
The scorecard was created to drive a “race to the top” among central banks on climate action, however the latest rankings show the Bank of England has slipped from 5th to 7th place.
This change can largely be attributed to inaction. China and Brazil have surged ahead by making significant strides in incorporating climate risks into their financial policies since the publication of the latest scorecard, while the UK has stagnated.
The downgraded ranking shouldn’t come as a surprise after the Bank of England was open about having “slimmed down” its green work in February, following 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.
In July, Rachel Reeves pledged to make the UK a “clean energy superpower” by encouraging investment in green industry and technologies. However, unless the financial sector is given concrete targets to meet, this runs the risk of becoming an empty slogan.
The Bank of England regulates the financial sector. It has the tools at its disposal it needs to divert the sector’s investments away from fossil fuels and towards clean and sustainable activity. And disappointingly, it has not.
Reinstating the Bank’s climate priorities in Reeves’ remit letter this autumn would send a clear signal to policymakers that they need to step up to green the financial system.