Bank of England aims for net-zero emissions before 2050

© Reuters. A pigeon stands in front of the Bank of England in London, Britain, April 9, 2018. Picture taken April 9, 2018. REUTERS/Hannah McKay

By David Milliken

LONDON (Reuters) – Bank of England Governor Andrew Bailey said on Thursday that the central bank would cut the carbon emissions from printing banknotes and running its buildings to net zero by 2050 at the very latest.

British finance minister Rishi Sunak changed the BoE’s mandate in March to require it to support the government’s goal of reducing greenhouse gas emissions to net zero.

“I can confirm today that the Bank is committing to reduce emissions from our physical operations so they will be consistent with net-zero by 2050 at the latest,” Bailey said in a speech hosted by the Bank for International Settlements.

“I will be disappointed if it takes that long,” he added.

The BoE this month will for the first time require British banks and insurers to undertake a ‘stress test’ of their exposure to financial risks linked to climate change.

However, Bailey told a Reuters conference on Tuesday that it was too soon to link capital requirements directly to climate change goals.

Instead, a better approach was to require businesses to disclose their climate impact clearly to investors, Bailey said.

Sunak is seeking to get agreement on this at a G7 meeting of finance ministers from the world’s largest advanced economies which begins in London on Friday.

Last month the BoE said it would start to shift its 20 billion pounds ($28 billion) of corporate bond holdings away from businesses which were not on a path to reduce carbon emissions. But it does not plan an immediate divestment of the most polluting bonds, arguing that it is better to apply pressure more gradually.

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($1 = 0.7093 pounds)

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