Top Posts
Earthquake hits Northern Iran amid tensions with Israel
Flash Flood: Ogun appeals to residents not to...
VP seeks collaboration to tackle Illegal migration, climate...
Fashion brands accused of shortcuts on climate pledges
BRICS countries develop shared position on climate finance
Europe launches climate change commission
Macron rebukes climate change deniers Ahead of Nice...
Zulum, others urge FG to accelerate N80bn rehabilitation...
Group Advocates Stronger Policies To Mitigate Climate Change
Death toll from Mokwa flood rises to 153
EcoNai Newsroom
  • Newsround
  • Nigeria
  • Africa
  • World
World

BoE says insurers, bankers need to do more to prepare for climate change

by admineconai June 9, 2022
written by admineconai June 9, 2022
635

The Bank of England (BoE) has called on banks and insurers to do all they can to tackle the growing impact of climate change, warning that those who fail to manage climate risks as a “first-order” issue could face a 10% to 15% hit to annual profits and higher capital requirements.

The BoE, In its first comprehensive stress test of how Britain’s financial system will cope with climate change and the shift to a net zero-carbon economy by 2050, said that action now would lower future costs.

BoE Deputy Governor, Sam Woods in a speech, said that the first key lesson from this exercise is that over time climate risks will become a persistent drag on banks’ and insurers’ profitability – particularly if they don’t manage them effectively.

Read also: Report shows Ukraine war prompting fossil fuel ‘gold rush’

“While they vary across firms and scenarios, overall loss rates are equivalent to an average drag on annual profits of around 10-15%.” he was quoted as saying.

While the Bank of France was the first among central banks to undertake a climate stress test of banks and insurers, Fitch said that the BoE test was the toughest by a central bank so far.

According to reports, banks across the world face increasing pressure from climate activists to cut financing to fossil fuel projects. While the European Central Bank has planned a test for this year, the U.S. Federal Reserve has not begun such an exercise.

In his reaction, David Barmes, senior economist at Positive Money, which campaigns for a sustainable economy said that “Outright restrictions on lending to new fossil fuel projects must now be on the table”.

For Woods, banks and insurers would need to continue financing more carbon-intensive sectors of the economy to help them transition to a low carbon future.

“Cutting off finance to these corporates too quickly could prove counterproductive, and have wide-ranging macroeconomic and societal consequences, including through elevated energy prices – potentially akin to those whose negative effects we are experiencing today.”

Story was adapted from Reuters.

BankClimate changeEffortFight
0 comment 0 FacebookTwitterPinterestEmail
admineconai

previous post
Experts warn Cross River forests will be extinct in 10 years
next post
Report shows vulnerable countries lost $525 billion to climate change in 2 decades

Related Posts

Fashion brands accused of shortcuts on climate pledges

June 12, 2025

BRICS countries develop shared position on climate finance

June 12, 2025

Europe launches climate change commission

June 12, 2025

Macron rebukes climate change deniers Ahead of Nice...

June 9, 2025

Scientists say nearly 40% of the world’s glaciers...

June 3, 2025

German court dismisses climate case against RWE

May 28, 2025

WHO Climate Change action plan approved

May 28, 2025

Report: World likely to breach 1.5°C limit in...

May 28, 2025

At Bonn climate talks, Brazil demands early deals...

May 23, 2025

Guterres raises alarm over rapid Himalayan glacier melt

May 17, 2025

Leave a Comment Cancel Reply

Save my name, email, and website in this browser for the next time I comment.

Newsletter

Subscribe my Newsletter for new blog posts, tips & new photos. Let's stay updated!

  • Facebook
  • Twitter
  • Instagram
  • Linkedin
  • Bloglovin
  • Vimeo

@2021 - All Right Reserved. Designed and Developed by Eco-Nai+

EcoNai Newsroom
  • Newsround
  • Nigeria
  • Africa
  • World