The Labour Party is developing plans to “go after” banks and hedge funds “financing climate change”.
John McDonnell revealed his approach ahead of the publication of the Finance and Climate Change report, authored by a group including academics and experts as well as former head of the civil service, Bob Kerslake.
The report recommends banks and hedge funds “should be forced to publish the climate-related risks associated with their financial assets”.
The report authors found that:
- 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’
Among other recommendations, the authors say that:
- 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
Shadow Chancellor 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 take on board these findings and recommendations and bring forward our own proposals ahead of the General Election.”
The report recommends that the Bank of England change its monetary policy operations to “avoid carbon bias” and said larger banks should penalised for involvement in environmentally unfriendly investments.
Labour leader Jeremy Corbyn this week attacked polluters from hedge funds and large companies.
The party also pledged that all new homes would be “zero carbon” within three years under Labour plans to tackle the housing and climate crises at the same time.
While the Conservatives have a legally binding target to achieve a zero carbon economy by 2050, shadow chancellor John McDonnell wants the goal reached by the 2030s using financial levers.
Boris Johnson has failed to meet Parliament’s deadline to tackle the climate and environment emergency
Labour has also gone on the attack on Boris Johnson after the government failed to bring urgent plans to tackle the climate and environment emergency in time to meet the six month deadline set by parliament.
The climate and emergency motion, passed by parliament on the 1 May 2019, “calls on the Government to lay before the House within the next six months urgent proposals to restore the UK’s natural environment and to deliver a circular, zero waste economy.”
Since parliament’s declaration of a climate and environment emergency the Conservative government has failed to pursue policies adequate to the scale of the crisis.
According to Labour in the six months since the declaration of a climate and environment emergency, the Tories have continued to pursue policies that are damaging to the natural environment in the UK and abroad. These include:
- Maintaining the ban on onshore wind while forcing through dangerous fracking that will scar our environment;
- Pursuing local government cuts that have seen record amounts of litter on our streets while prosecutions for fly-tipping are at a ten year low;
- Creating a “hostile environment” for renewables, leading to clean energy investment plummeting in the last three years;
- Proceeding with cuts to Natural England that have seen its core budget cut in half since 2010, with devastating consequences for our environment;
- Continuing to use UK Export Finance to subsidise fracking and fossil fuel extraction abroad.
The Prime Minister has also hired a fracking lobbyist to write the Conservative manifesto.
Sue Hayman MP, Shadow Environment Secretary said:
“By ignoring the climate and environment emergency, Boris Johnson has shown that he cannot be trusted to save our planet.
“This election is our last chance to stop the climate and environment emergency.
“The next Labour government will usher in a Green Industrial Revolution to tackle climate change. Labour has a radical, credible plan for tackling the climate crisis and creating a million good, unionised green jobs across the country.”
Most Brits say climate change will influence their general election vote says new poll
More than half of people say climate change will influence the way they vote in the next general election, a poll published this week suggests.
Almost two thirds (63%) agree that politicians are not discussing the issue of climate change enough in the run up to the next national vote, the poll for environmental lawyers ClientEarth found.