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BANK OF ENGLAND AIMS FOR NET ZERO CARBON EMISSIONS BY 2050

06/07/2021

On June 3, the Bank of England (BoE)’s Governor, Andrew Bailey, stated the bank would seek to cut greenhouse gas emissions associated with running its physical offices and printing banknotes to net zero by 2050 “at the latest.” The decision is in line with a larger push by the United Kingdom to improve its climate action agenda ahead of the upcoming United Nations Climate Change Conference (COP26), to be hosted by the country in Glasgow later this year (Reuters and Reuters).

This past March, British Finance Minister Rishi Sunak amended BoE’s mandate to require that the institution support and complement the government’s national emissions reductions goals. Since then, BoE has been moving forward on this. Beyond Governor Bailey’s June 3 announcement, BoE will also be requiring British banks and insurers to take a “stress test” to gauge their exposure to climate-related financial risks (Reuters) this month. Last month, BoE also unveiled plans to “green” its corporate bond purchase scheme (Yahoo and Bloomberg).

Though the direction for Britain’s central financial institution and many other nations’ Central Banks have begun to lean toward climate preparedness (Wall Street Journal), there remains some hesitancy toward decisive action. Governor Bailey, though affirming the importance of climate action, recently stated that he felt it is too early to link capital requirements directly to climate change goals (Reuters).