Bank of England mulls tougher climate goals, while Kiwis report record warm winter
The Bank of England has revealed it is looking at permanently cutting staff air travel as it considers more ambitious climate change targets under a drive to “practise what we preach”. Meanwhile, the effects of global warming are felt in New Zealand, as it experiences record-breaking June temperatures.
Sarah Breeden, the Bank’s lead on climate change issues and its newly appointed executive director for financial stability and risk, said the Bank is having an “active debate” over plans to make goals on reducing its own carbon footprint more ambitious.
Part of this could see the Bank cut back on policymaker trips overseas in favour of virtual meetings even once pandemic restrictions have been lifted and travel becomes more open again.
The proposal comes after the Bank recently beat its climate target nine years early, as policymakers were unable to jet around the globe due to the pandemic.
Its second annual climate-related financial disclosures report showed that on one measure the Bank’s carbon emissions plunged by 74 per cent, smashing through its initial target to reduce its footprint by 63 per cent by 2030, before reaching net-zero by 2050.
Speaking to the PA news agency, Breeden said: “We’ve learned in the pandemic that you can get a lot more done virtually than we ever thought possible. Going back to 2019 levels of travel shouldn’t be necessary, but the answer is not zero either. Our target is to reach net-zero by 2050 at the latest, but we’re seeing if we can do more.”
Breeden added that the Bank is keen to lead by example as it puts climate issues at the heart of its policy, having been handed a new 'green' mandate in this year’s Budget.
The Bank’s executive sponsor for climate change, who will also become a member of its Financial Policy Committee (FPC) later this summer, said the Bank’s recent move to make its £20bn corporate bond portfolio greener was part of a drive to “practise what we preach”.
The Bank has said it will set targets for the overall emissions of its holdings and invest in green corporate bonds where possible. It also recently unveiled its first-ever climate change stress tests, which will scrutinise the resilience of Britain’s biggest banks and insurers against global warming risks over the next 30 years.
However, the Bank has come under fire from sustainable economy campaign group Positive Money for not going further and linking the tests to the capital that banks and insurers must hold on their balance sheets.
Breeden responded to this, saying that while the Bank’s role is “not to take companies to task”, it may look at capital requirements once past the exploratory first step, given that “capital reflects risk”. She stressed the “case has not been made yet” for capital requirements and that choosing where and how the costs of the net-zero transition lands should lie with “elected politicians”.
The Bank’s green guru is on a mission to use the Bank of England’s influence as a force for good in addressing climate change issues in the financial sector. Despite having only 6.5 per cent of the sterling corporate bond market, it is important for the Bank to lead the way, Breeden said, adding: “We have a small wallet but a loud voice when it comes to our actions”.
Setting net-zero stretch objectives is another symbolic move from the Bank and an important one with the United Nations COP26 climate change conference in Glasgow approaching.
Breeden said while it is vital that the financial sector needs to play its part in achieving net-zero emissions, “we all need to change”, adding that “The financial system has got a really important job in helping us get there, but it’s an economy-wide transition”.
Meanwhile, on the other side of the planet, the real-world effects of climate change are being felt in New Zealand. Hot on the heels of the devastating and fatal 'heat dome' over Canada and parts of the US recently, New Zealand is currently experiencing its warmest June since records began.
The average temperature in June was 10.6°C (51°F), the government-owned National Institute of Water and Atmospheric Research agency reported on Monday. This is 2°C above the 30-year average for June and more than 0.3°C higher than the previous record set in 2003 and again in 2014. Record-keeping began in 1909.
Gregor Macara, a climate scientist at the agency, said the average temperature in New Zealand had increased by about 1°C over the past century. He said that if the trend continues, people can expect later and milder winters, followed by earlier springs.
A range of factors have led to the latest record June heat, including more winds coming from the milder north rather than the Antarctic south, and unusually warm ocean temperatures, Macara said, adding that while the vagaries of weather will change from month to month, “the underlying trend is of increasing temperatures and overall warming”.
The record warm temperatures have seen ski fields struggle to open, putting pressure on businesses that rely on the winter weather. Snow cameras at several of the larger resorts show exposed rocks and earth sprinkled with a dusting of snow on many runs.
Paul Anderson, chief executive of NZSki, which operates the popular Coronet Peak, Mt Hutt and The Remarkables ski fields, said, “It’s really clear that climate change is a reality. You can’t argue with that science”.
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