17 Jun The Bank of England Responds to Climate Change
In its Quarterly Bulletin 2017 Q2 published June 16, The Bank of England announced they will initiate a review of climate-related risks in the UK banking sector. The work will be carried out in a similar way to the assessment of insurance companies it launched in 2014. As stated in the publication, these climate-related risks arise through two primary channels: the physical effects of climate change and the impact of changes associated with the transition to a lower-carbon economy. The Bank of England’s response has two core elements. Firstly through engaging with firms that face current climate-related risks and secondly, enhancing the resilience of the UK financial system by supporting an orderly market transition. The BOE stated, “if governments push ahead with climate policies, but investors do not adapt their investment strategies accordingly, misallocation will grow.”
Full report is available here.