(Bloomberg) -- The U.K. financial ecosystem could be in for a radical green transformation as the Labour Party unveiled plans to de-carbonize the industry if it wins the general election on Dec. 12.
An independent panel of experts, commissioned by Shadow Chancellor of the Exchequer John McDonnell, published a report on Saturday with recommendations on how to reduce the financial industry’s climate footprint. They include forcing firms, including banks, to publish their climate-related risks associated with their financial assets, as well as a more climate-aligned monetary policy by the Bank of England.
“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,” McDonnell said in a statement. “Labour will take on board these findings and recommendations and bring forward our own proposals ahead of the General Election.”
Fossil fuel financing by U.K. banks exceeded $100 billion in the three years through 2018, according to the report. And high-carbon companies are allowed access the stock market at a low cost by the financial institutions.
While some companies have reduced their fossil-fuel exposure and the Bank of England has taken steps to address the “implicit carbon bias” in its operations, the existing private finance sector suffers from significant shortcomings that open the door to “green washing,” according to the report.
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