Our 'Progressive Green Finance Strategy' for @UKLabour is out - with @YannisDafermos @M_Nikolaidi @Frank_vanlerven @AnnPettifor @michaelujacobs @SirBobKerslake ft.com/content/a8a6ca…
The Progressive Green Finance Strategy offers 11 recommendations to green banks & shadow banks in line with 2030 net zero ambitions, on 3 pillars:
1. Institutional architecture
2. Monetary and banking regulation
3. Shadow banking/market-based finance
labour.org.uk/wp-content/upl…
1. Institutional architecture
2. Monetary and banking regulation
3. Shadow banking/market-based finance
labour.org.uk/wp-content/upl…
Recommendation I: Develop a Green Public Taxonomy. Private ESG approaches open the door to greenwashing while TCFD risks disclosure cannot on their own power deep decarbonisation agendas.
Recommendation II: use the Green Public Taxonomy for mandatory disclosure, alongside TCFD.
Recommendation III: Set up the Green Finance TaskForce. GFAT should coordinate green finance policies with other climate policies (green fiscal, industrial) and with Committee on Climate Change.
Recommendation IV: Green the mandate of @bankofengland by re-interpreting and/or modifying it to justify the active use of central bank tools for the decarbonisation of the UK economy.
Recommendation V: turn the Bank of England’s monetary policy operations green. As @KGeorgieva noted at WB/IMF meetings in October, it is vital that we address question of how central banks should use their tools to reduce incentives for brown assets. Here is our solution:
Recommendation VI: Use the National Investment Bank to steer bank credit towards low carbon projects and correct structural bias towards lending to property and financial sectors.
Recommendation VII: Turn corporate QE scheme green. Although the scheme is intended to be ‘market neutral’, it implicitly favours climate- intensive sectors. We suggest a climate-aligned approach to the reinvestment of the cash flows.
Recommendation VIII: Adopt risk rules for banks which factor in climate risk. We propose that risk weights account for the greenness/brownness of the assets that banks hold, based on the Green Public Taxonomy.
Recommendation IX: Make shadow banks disclose their climate risks. Institutional investors and their asset managers are important actors for green finance agendas, and their lobbying for ESG approaches opens door to subsidised greenwashing if governments are not careful.
Recommendation X: green/brown haircuts on shadow banking activities, pushed at global level via FSB. Also #greenFTT on ETFs to reduce brown index investment.
Recommendation XI: Introduce a penalising factor for Global Systemically Important Banks funding polluting activities.
beyond UK. @Lagarde promised to green @ecb - this requires both promoting green & penalising brown finance identified through robust public taxonomies. Otherwise green finance agendas risk becoming Wall Street Climate Consensus - subsidised green washing. cc @GeorgeMonbiot
And @UKLabour @johnmcdonnellMP now committed to green finance
@UKLabour @johnmcdonnellMP asset managers, we argue in our report, are systemic carbon financiers, and should be regulated as such, via mandatory disclosures, haircuts on their collateral-based positions, and #greenFTT on ETF shares
More proof transformational change cannot come from official UK government policy and that issues raised in our report are systemic - you may find our recommendations useful @thatginamiller
