The city finances twice as much CO2 as the UK emits

According to a study by WWF and Greenpeace, London’s financial sector is still a long way from global ambitions to reduce fossil fuel emissions.

The carbon emissions financed by banks and asset managers in the UK are almost double that of the country, according to a study by WWF and Greenpeace on Tuesday, which calls on London to demand more effort from the sector.

“The financial sector will play a critical role in determining whether the world will successfully transition to a sustainable low-carbon economy,” the study said.

“To date, neither the government nor any regulator has taken adequate action to address the problem of global emissions funded by UK private financial institutions and ensure that they align their activities with the ambitions” of the country, namely carbon neutrality by 2050, she adds.

“Our results show that the carbon emissions of the analyzed financial companies are 805 million tons”, of which just over half are for banks, the rest for asset managers, according to their published data from 2019, WWF and Greenpeace specify.

More than emissions from Germany and Canada

This represents “nearly 1.8 times the emissions produced in the UK,” the study describes.

This is more than the emissions of Germany and Canada, the study finds, and slightly less than those of Iran, the 8th country with the most CO2 emissions.

The survey includes 15 banks and ten asset managers with a presence in the United Kingdom, but not all of them are British institutions.

The City is the district of London where most of the major banks in the UK are headquartered, but the term often refers to the entire financial sector of the country.

The study does not include insurance, so says it largely underestimates the environmental footprint of the UK’s financial sector, which they believe should be considered a high-carbon sector “such as the oil, mining, aviation sectors, etc. .

“Instead, some banks and financial institutions are making voluntary commitments to reduce their carbon emissions, many of which have been considered ‘greenwashing'” and insufficient, the study continues.

“Planning a transition to carbon neutrality without considering the financial sector is like putting a link on a patient undergoing open-heart surgery,” said Tanya Steele, WWF Executive Director.

The city reminds of its ambitions

She calls on the UK government to “take the lead” in hosting the next major international environmental meeting, COP26, in Glasgow in November, demanding that “financial institutions have a plan to achieve carbon neutrality that includes their investments.

A spokesperson for industry association UK Finance responded to the investigation by saying that “credit institutions take their responsibilities to society very seriously and are playing a leading role, together with the government and the Bank of England, in the transition to carbon neutral financing”.

The association recalls that last month major financial players announced their ambition to achieve carbon neutrality by 2050 by forming the Net Zero Banking Alliance, led by former Bank of England Governor Mark Carney, who became UN Special Envoy. for the climate and one of the organizers of COP26.

An initiative that has been coldly welcomed by environmental NGOs who speak of “distraction”.

The City of London organisation, which represents London’s historic financial district, responded by saying it was “a frontrunner in the fight against climate change”, arguing that “London is consistently ranked among the world’s leading centers of green finances”.

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

Another survey conducted in March by several NGOs pointed to the increase in financing provided by major banks to fossil fuel producers between 2016 and 2020.

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