A committee of MPs has told the Bank of England that it must do more to ensure a green recovery from the pandemic.
The environmental audit committee wrote to the Bank of England governor and said that large companies receiving tax-payers money should publish information on their exposure to climate-related risks.
The committee highlighted how around 230 large companies have received financial aid from the government including British Airways, Nissan, and Rolls Royce – who all have high impacts on the environment.
The letter also focused on long-term corporate bonds. It said that the Bank of England was “at risk of creating a moral hazard by purchasing high-carbon bonds and providing finance to companies in high-carbon sectors without placing any conditions on them to make a transition to net-zero”.
The EAC’s chairman, Philip Dunne, said: “We are at a crunch point not only to mitigate the effects of climate change, but to rescue vast swathes of the economy from the impacts of coronavirus.
“It makes sense to tackle both together. (But) the Bank’s corporate bond purchases are currently aligned with a catastrophic 3.5°C temperature rise by 2100.
“We are calling on the Bank to show leadership on climate change. It has a moral responsibility to align its corporate bond purchasing programme with the goals of Paris Agreement; and it should require companies receiving millions of pounds of taxpayers’ money to publish climate-related financial disclosures.”
A spokesperson from the Bank of England has said that a response will be issued in due course. The spokesperson said: “Climate change is a strategic priority for the Bank. We have an ambitious work programme on climate change, [including] the stress testing of the largest UK banks and insurers against climate-related financial risks … Work to consider how best to take account of climate considerations in our corporate bond portfolio is already under way.”
Disclosures by large companies on their exposure to climate-related risks were recommended by the former Bank governor Mark Carney but are not yet mandatory.