The UK Government’s Environmental Audit Committee (EAC) has called for all public financial support issued during the Covid-19 recovery to be aligned with the country’s net zero climate objectives.
In a report entitled Growing back better: putting nature and net zero at the heart of the economic recovery, the organisation – which is a select committee of the House of Commons – recommended that the Chancellor and the Bank of England synchronise public support and bailouts with established environmental initiatives.
Ecological charity ClientEarth, which gave evidence for the report in September 2020, claimed the move would “ensure a resilient recovery” but suggested that recent Government support – such as a bailout loan for Celsa Steel under Project Birch and guaranteed loans to airlines – had not been transparent or had no or limited climate conditions attached.
Jamie Sawyer (pictured above), a lawyer for ClientEarth, said: “For all future bailouts and public support, the Government and the Bank of England… must attach legally enforceable conditions to public support that require a commitment to reach net zero by 2050, and a clear strategy to get there.
“It must be a mandatory requirement, as an extension of soon-to-be mandatory Task Force on Climate Related Disclosures reporting, for listed companies to disclose a credible Paris-aligned strategy for how they will achieve net zero emissions by 2050.”
The EAC’s report also called for reform of the Bank of England’s Corporate Bond Purchase Scheme to link it to low-carbon initiatives, including the Paris Agreement.
“We need to see a rapid decarbonisation of the Corporate Bond Purchase Scheme – but the Bank of England has not committed to anything concrete yet,” said Sawyer, “it should take action before the pre-COP summit in September, to show true climate leadership and encourage others to follow.
“We hope [the Treasury] will explicitly direct the Bank to consider and mitigate the impact that its monetary policy has on climate change.”
