The Bank of England will not name and shame lenders which fail its climate change stress tests.
It has set out its review of how the UK’s financial services industry will cope with global warming, which will scrutinise the 19 biggest lenders and insurers.
But the results of the test will not be used to determine how much spare money banks should hold in the event of a crisis. Nor will the institutions’ individual scores be revealed.
The Bank of England has set out its review of how the UK’s financial services industry will cope with global warming, which will scrutinise the 19 biggest lenders and insurers
Governor Andrew Bailey said: ‘The end result will be more robust management of climate-related financial risks across the sector.’
The Bank is worried the financial system could be thrown into crisis if climate change worsens.
Insurers could have to pay out huge amounts of money to customers affected by severe weather, and banks may suffer if mortgage customers are hit by floods.
The Bank’s climate change tests are due to be published in aggregate next May.
It came as the Treasury announced an independent group to tackle ‘greenwashing’, where investment funds try to make themselves appear more climate-friendly, to win investor approval.
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