2nd Mar 2024

Fossil fuel funding too high, British bank chief says

  • The outgoing head of the Bank of England, Mark Carney, said that the stated efforts to curb funding in fossil fuels have been 'not shifting quick sufficient' (Photo: Bank of England)

The outgoing head of the Bank of England, Mark Carney, warned on Monday (30 December) that the shift in the financial sector towards sustainability is far too slow.

Carney, who will take up a role next year as the United Nations special envoy for climate action and finance, said that the stated efforts to curb funding in fossil fuels have been "not shifting sufficiently quickly" and the assets in the sector could end up "worthless".

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Carney pointed out that companies and financial institutions with investments in fossil fuels would "have to make the judgment and justify to the people whose money it ultimately is".

"The concern is whether we will spend another decade doing worthy things, but not enough," he said in a BBC Radio 4 interview.

Environmental groups and some politicians in Europe have recently questioned the possibility of running a capitalist economy without threatening the future of the planet.

However, according to the chief of the Bank of England, it is reasonable to question where the role of the state ended and what the role of markets was to reduce the impacts of climate change.

"To deliver, there needs to be shared understanding about what's necessary," he added.

'Tragedy of the horizon'

"A question for every company, every financial institution, every asset manager, pension fund or insurer: What's your plan?," Carney said, warning that firms will have to do their part to preserve solvency.

Climate change is what he called a "tragedy of the horizon," since extreme weather events were inevitable.

"In those horizons, there will be more extreme weather events, but by the time that the extreme events become so prevalent and so obvious it's too late to do anything about it," he said.

"We look to political leaders to start addressing future problems today," he added.

Meanwhile, the European Environmental Agency (EEA) warned the European Union that investing in sustainability and stopping funding for environmentally damaging activities, especially fossil fuels, was needed to tackle the negative consequences of climate change.

Europe will not achieve its 2030 climate and energy targets "without urgent action during the next 10 years," an EEA report concluded.

Additionally, the EU managed to agree on a common classification system for environmentally-sustainable investments.

The agreement is the first step to set a framework for sustainable finance that will help investors and consumers to identify economic activities which can unambiguously be considered environmentally green.

However, the "green" taxonomy was expected to be in place by the end of 2021 and to ensure its full application only by the end of 2022, which environmental groups criticised "given the urgency of the climate crisis".

Leaders face crucial EU summit for climate action

EU leaders are meeting on Thursday and Friday in three different formats: a regular summit to discuss the EU's long-term budget and the 2050 climate-neutrality goal, a European Council (Article 50) meeting, and a European summit.

EU supply chain law fails, with 14 states failing to back it

Member states failed on Wednesday to agree to the EU's long-awaited Corporate Sustainable Due Diligence Directive, after 13 EU ambassadors declared abstention and one, Sweden, expressed opposition (there was no formal vote), EUobserver has learned.


Why are the banking lobby afraid of a digital euro?

Europeans deserve a digital euro that transcends the narrow interests of the banking lobby and embodies the promise of a fairer and more competitive monetary and financial landscape.

Latest News

  1. EU docks €32m in funding to UN Gaza agency pending audit
  2. 'Outdated' rules bar MEP from entering plenary with child
  3. Commission plays down row over Rwanda minerals pact
  4. EU socialists set to anoint placeholder candidate
  5. Why are the banking lobby afraid of a digital euro?
  6. Deepfake dystopia — Russia's disinformation in Spain and Italy
  7. Putin's nuclear riposte to Macron fails to impress EU diplomats
  8. EU won't yet commit funding UN agency in Gaza amid hunger

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us