Our response to the Environmental Audit Committee’s report on Green Finance4 June 2018
The Environmental Audit Committee of the House of Commons has published their ‘Greening Finance: embedding sustainability in financial decision making’ report of their recent inquiry into green finance.
The report highlights that there are inadequacies in how the UK’s framework of financial regulation is currently managing climate change risk and recommends that there should be mandatory reporting of climate-related risks.
Mary Creagh MP, Chair of the Environmental Audit Committee explained,
“We need to fix the incentives in our financial system that encourage short term thinking. Long-term sustainability must be factored into financial decision making.”
Following the publication of the Committee’s report, Paul Ellis, CEO of Ecology Building Society responded,
“If we are to meet our Paris climate change commitments, finance needs to support the transition to a low-carbon economy and mandatory climate risk reporting will help ensure pension funds invest in firms which will be more sustainable and resilient in the long-term.
“Given housing and the built environment makes up more than a quarter of our carbon emissions, we’d like to see the Committee broaden their investigations to consider the ways lenders should help incentivise energy-efficiency improvements – whether that’s retrofitting our existing housing stock or building zero carbon homes.
“We’ve been providing sustainable mortgages for more than thirty years, offering innovative discounts that already take climate risk into account and encourage the most energy efficient projects and properties.”