In a report, by an independent group of experts, published today (2 November) it is revealed that the banks and financial institutions are still aggressively funding the fossil fuel industry which is the main contributor to global warming and climate change. Amongst the reports findings are:

• UK banks’ fossil fuel financing during the period 2016–2018 was more than US$100 billion
• Financial institutions allow high-carbon companies to access the stock market at a low cost
• Some companies, such as Aviva, have reduced their holdings linked to coal and the Bank of England has taken steps to address the “implicit carbon bias” in its operations
• But existing private sector approaches to “Environmental, Social and Governance” considerations suffer from significant shortcomings that open the door to ‘greenwashing’

Given the urgency of the climate emergency this is not good enough. Despite Parliament declaring a climate emergency six months ago and instructing the Government to bring forward a plan for dealing with it the Tories have done nothing.

The report makes a series of recommendations to deal with this including:

• Firms, including banks and ‘shadow banks’, should be forced to publish the climate-related risks associated with their financial assets
• The Bank of England should change the way it conducts monetary policy operations to avoid carbon bias
• Large banks should be penalised for involvement in so-called ‘brown’ investments using the ‘Basel III’ regulations

This report comes hard on the heels of Andrea Leadsom expressing her ”disappointment” at the government’s announcement that it is ”pausing” fracking in England and Wales. This is clearly a cynical short term move to try and buy some votes. If the Tories win the General election fracking will start again.

By comparison this report, commissioned by John McDonnell, makes clear Labour’s determination to address these issues. Commenting on the publication of the report John McDonnell said:

• “It’s clear there is a long way to go before the finance sector is pulling its weight to achieve the rapid changes our economy needs to meet our climate obligations.
• “Labour will consider these findings and recommendations carefully and bring forward our own proposals ahead of the General Election.”

Only Labour will treat the threat of climate change seriously and provide a national and worldwide lead to tackle it.