The Guardian News is reporting that today, the Bank of England announced that it will test insurers and financial institutions on their exposure to risk from climate change, and examine companies responses. The proposals include a variety of scenarios, including a global rise in temperature of up to 4C (double the Paris agreement of 2C and more than double the efforts to keep it at 1.5C).
The testing will be released in 2021, and will have three scenarios: “early policy action” which means immediate actions to keep the temperature rise to 2C, “late policy action” which means waiting 10 years to take action (this will mean the need for stronger and more drastic actions that could affect the global economy), and “no action” which means governments and consumers do nothing and the global temperature rises up to 4C.
The stress tests will include many banks including Lloyds and the Royal Bank of Scotland, and 39 insurers.
We hope this action in the financial sector will steer banks and insurers to stop financing risky developments, to stop financing power plants that contribute to climate change, and to invest more in clean renewable energy.
