Party members voted for the policy near-unanimously, which would also see UK pension funds required to remove fossil fuels from their investment portfolios.
Green Party members have voted near-unanimously to support a policy of banning British banks from holding fossil fuel assets by 2030. They backed the policy at the party’s spring conference held online this weekend.
The motion members supported also called for the Financial Conduct Authority to prevent British banks from investing in new fossil fuel infrastructure by the end of 2022.
Presently, British banks invest billions of pounds in the fossil fuel industry. Barclays is the biggest investor in fossil fuels in Europe, and seventh largest in the world. HSBC is the thirteenth biggest fossil fuel investor in the world.
The Green Party’s spokesperson on finance, and a former MEP Molly Scott Cato said, “In spite of all the fine words from financiers in Glasgow at the COP26 climate summit, our largest banks are still pumping billions into new oil and gas production, pursuing dirty profits and putting the lives of our grandchildren at risk.
“This motion means the government will have to put its money where its mouth is on the climate crisis. They will need to bring forward rules and regulations that force the UK finance sector to clean up its act and play its part in the rapid transition away from fossil fuels. Banks, stock markets and other financial actors need to shift finance towards the sustainable sectors of the green economy.”
The Greens’ new policy also proposes changes to the Bank of England’s operations. It calls for the Bank of England’s mandate to be changed, so that financing the transition to a low carbon economy becomes its central objective. The Greens’ are now also supporting the introduction of credit bans or ceilings for ‘unsustainable activities’ which would be mandatory for all banks relying on the Bank of England as a lender of last resort.
Scott Cato continued, “It is time to hold UK banks to account, starting at the top, with the Bank of England. A condition of holding a UK banking licence must be the presentation of an investment strategy outlining a clear pathway to divest from fossil fuel assets.
“With UK pension funds holding around £128 billion in fossil fuel assets, regulation is also desperately needed to eliminate fossil fuel assets from securities portfolios, pensions and insurance products.
“The finance sector has for too long been funding climate chaos and this has been diverting finance from investing in a healthier and cleaner economy. The pursuit of dirty profits means that we will all pay the price. It’s time for us to ensure that banks play their part in the transition to a green economy.”
In addition to regulations on the banking sector, the Greens’ policy would see UK pension and investment funds required to remove fossil fuel assets from their investment portfolios.
This article was published jointly with Bright Green.
Chris Jarvis is head of strategy and development at Left Foot Forward