A Bank of England (BoE) policymaker has said that the bank is prepared to boost its investment in renewable energy, with the rise in demand for coal following Russia’s invasion of Ukraine a setback to reaching a net-zero economy by 2050.
Elisabeth Stheeman, a member of the BoE’s Financial Policy Committee (FPC), said that the impact of Russia’s invasion of Ukraine on the transition to net-zero owing to the increase in energy prices was yet to be determined.
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In a speech, Stheeman said that recent events had highlighted the transition risks that businesses faced, noting that the role of central banks and supervisors was to continue to help build resilience to climate-related financial risks, and in doing so they can also help support the transition.
She explained that the Bank had conducted a “climate scenario” exercise to assess the resiliency of banks, insurers and the wider financial system to different climate-related risks, adding that aggregated results would be published on May 24.
“The exercise is not intended to inform the setting of capital requirements,” Stheeman said. “The FPC will also use it to understand risk management capabilities in the financial sector, and how banks and insurers may adapt their business models in the face of different climate pathways”.
Story was adapted from Euronews.
