The City would finance twice as many CO2 emissions as the UK emits

In 2015, the signatory countries of the Paris Agreement pledged to be carbon neutral by 2050. Yet the financial sector is regularly accused of not taking measures to move in this direction. This Tuesday, a new study by WWF and Greenpace implicates one of the world’s main financial centers, the City.

According to this study, the CO2 emissions financed by banks and asset managers in the United Kingdom are almost double those rejected by the country. “Our results show that the CO2 emissions associated with the financial companies analyzed amount to 805 million tonnes”, with just over half for banks, the rest for asset managers, according to their published data. from 2019, specify WWF and Greenpeace.

Almost as much CO2 as Iran

This represents “almost 1.8 times the emissions produced inside the United Kingdom”, details the study. This is more than the emissions of Germany or Canada and a little less than those of Iran, the 8th country emitting the most CO2.

The study covers 15 banks and ten asset managers that are present in the UK but not all UK institutions. It does not include insurance and therefore says it largely underestimates the carbon footprint of British finance, which according to them should be considered as “a sector with high carbon emissions” such as the oil, mining, aviation, etc. sectors.

NGOs call on government to act

“To date, neither the government nor any regulator has taken adequate steps to tackle the problem of global emissions financed by private financial institutions in the UK and ensure that they align their activities with the ambitions Of the country, explains the study. “Instead, some banks and financial institutions are making voluntary commitments to reduce their CO2 emissions, many of which are greenwashing” and are insufficient, she continues.

WWF Executive Director Tanya Steele calls on the UK government to “lead the way” as it organizes the next big international environmental meeting, COP26, in Glasgow in November. It must require “financial institutions to have a plan to achieve carbon neutrality including their investments.”

City players highlight their actions

A spokesperson for the UK Finance industry association reacted to the study by assuring that “lending institutions take their responsibilities to society very seriously and, alongside the government and the Bank of England, play a role. predominant role in the transition to carbon neutral finance ”.

He notably highlighted the objective posted last month by major financial players to achieve carbon neutrality by 2050, thus forming the “Net Zero Banking Alliance”. An initiative coldly received by environmental NGOs who speak of “diversion”.

The City of London organization, which represents the historic London financial district, reacted for its part by claiming to have “been ahead in the fight against climate change”. She argues that “London is consistently ranked among the world’s leading green finance centers.”

Finance regularly singled out

A report by another environmental NGO, Reclaim Finance, accused the big British banks in early May, despite their announcements in favor of carbon neutrality, of being “at the forefront of financing oil, coal and other hydrocarbons” .

Another study carried out by several NGOs in March had pointed to the increase in funding granted to fossil energy producers by the big banks between 2016 and 2020. Despite a drop of 9% due to the pandemic, the level of this funding remained ” higher than that of 2016, the year following the adoption of the Paris Agreement ”.

With AFP

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