To see the most recent content, please visit the homepage.
Motion #C02
We need the finance sector to play its part in the rapid transition away from fossil fuels that the climate emergency demands. This motion outlines how we would regulate the banks, stock markets and other financial players to shift finance away from fossil fuels and towards the sustainable sectors of
[Note from SOC - Synopsis word limit reached]
The background paper can be viewed by clicking here.
The FCA will adjust its policy so that no UK domiciled bank should invest in, or facilitate finance for, new fossil fuel development (including extraction, processing and distribution) or the new construction of unmitigated fossil-fuel powered electricity generation – whether in the UK or overseas – by the end of 2022. Sanctions to enforce this policy will include suspension of bonuses and dividend payouts, loss of access to central bank funding and ultimately the suspension of banking licences.
Any company holding a UK banking licence must present an investment strategy outlining a clear pathway to divest of its current fossil fuel assets as soon as possible, or at least by 2030, From 2030 it will become illegal to hold fossil fuel assets other than those deemed of strategic importance.
The Bank of England will be required to mainstream the climate crisis into their strategic thinking and to produce a climate-neutrality roadmap for the financial system, including forward planning scenarios consistent with a 1.5oC warming limit and equity obligations of the Glasgow Accord.
The Bank of England should adopt a policy of credit guidance with minimum but rapidly increasing quotas of lending to fund a just but urgent sustainability transition (to sustainable energy sources). There will be credit bans/ceilings for unsustainable activities. These targets will be mandatory for all banks relying on the central bank as a lender of last resort.
The Bank of England’s mandate will be changed so that funding the sustainability transition becomes a central objective, alongside the maintenance of price stability.
The UK will adopt a position in negotiations at the Basel Committee that fossil fuel assets will be subjected to higher risk weights and capital surcharges until their value as collateral assets reaches zero by 2030.
The Bank of England will be mandated to use its monetary creation powers and its asset purchase programme to finance projects to achieve our net zero targets, and to invest in jobs in green sectors via capitalization of a decentralized system of Infrastructure Banks and use the Term Funding Scheme to incentivize lending to green SMEs.
A strong and effective market for green bonds requires mandatory standards backed up by domestic and global monitoring and enforcement measures.
Greenwashing – such as the inclusion of gas or ‘blue hydrogen’ in bonds designated as ‘green’ – will undermine confidence in the market and allow fossil fuel companies to subvert the transition to net zero.
The UK will lead an international negotiation to agree mandatory global standards for climate bonds.
Based on the EU’s mandatory reporting framework, SFDR, UK market authorities will enforce clear standards for green bonds based on verifiable measurement and scientifically verifiable Paris compliance.
Non-bank financial institutions, such as UK pension funds, investment funds, mutual funds, brokers and insurance companies that sell policies in the UK must remove fossil fuel assets from their investment portfolios, securities transactions and balance sheets by 2030.
The fiduciary duty of pensions companies will ensure their investments are consistent with global targets set down in the Glasgow Accord.
The Financial Conduct Authority (FCA) will develop targets to eliminate all equities relating to fossil fuel exploitation from the UK stock market, and immediately prohibit the issuing of any new shares for those purposes.
Insurance companies will be required to stress-test their total exposure against projected climate hazards, revise their investment strategies in line with the UK’s obligations, including its equity obligations under the Glasgow Accord, and create innovative methods to address climate-related risk.