The UK financial sector’s amount of carbon emissions exceeded the net annual output of most countries in 2019 as a result of worldwide investments, green groups claimed on Tuesday.
A study by Greenpeace and the UK arm of the World Wildlife Fund comes ahead of the COP26 UN climate summit to be held in Glasgow in November.
“As the host of this year’s pivotal global climate summit, the (British) government can no longer turn a blind eye,” said Greenpeace UK’s Executive Director John Sauven in comments published alongside the report.
“Rather than relying on self-regulation we need legislation that forces all banks and asset managers to align all financing activities with the goals” of the 2015 Paris accord to keeping the global temperature increase to under two degrees Celsius and ideally closer to 1.5C by 2050.
“That would be genuine climate leadership,” Sauven added.
The report noted that banks and asset managers in the UK were together responsible for financing 805 million tonnes of carbon dioxide in 2019.
This would have made The City of London – commonly referred to as the UK financial sector – as the ninth biggest emitter of CO2 if it were a country, higher than Europe’s biggest economy Germany in tenth place, it added.
Responding, the City of London Corporation said that while it “is showing leadership in the fight against climate change”, it recognise “that there is no room for complacency.
“London is consistently ranked as the leading global centre when it comes to green finance, a key part of the solution to tackling climate change,” it added in a statement.
Sauven said “banks and investors are responsible for more emissions than most nations”, claiming that “the UK government is giving them a free pass”.
Greenpeace explained it had taken a sample of British and foreign banks and investors listed in the UK, adding that the study excludes insurers.
The study found that UK financial institutions in 2019 funded projects worldwide that contributed to carbon emissions almost double that of the country’s annual net total.
“Trying to set a path to net-zero emissions without tackling the UK financial sector is like sticking a plaster when the patient needs open heart surgery,” said WWF UK’s chief executive Tanya Steele.
Also reacting to the report, trade association UK Finance said “lenders take their responsibility to wider society very seriously and, together with the government and Bank of England, are playing a leading role in the shift to net zero finance”.
It pointed to the country’s six largest UK banking groups last month becoming founding members of the UN’s new Net Zero Banking Alliance, committing to net-zero emissions from their portfolios by 2050 or sooner.
“The industry will continue work with others to help mobilise capital in a way that takes account of local community and environmental needs,” UK Finance added.
The report comes after the Group of Seven wealthy nations on Friday agreed to end state financing of coal-fired power plants by the end of this year, and to “mostly decarbonise” electricity supplies in the 2030s.
Ahead of a leaders’ meeting in Britain next month, G7 countries’ climate and environment ministers have reaffirmed their commitment to the Paris accord.
