As such, the UK, which generated around 455 million tonnes of CO2 (excluding aviation and shipping), has effectively tripled its carbon footprint through the impact of a single sector. Banks contributed 415 million tonnes and asset managers 390 million tonnes.
The report goes on to say that, if the UK-based financial institutions represented a country in and of themselves, they would be the ninth most polluting in the world. By comparison, Germany emitted 776 million tonnes and Canada 763 million tonnes.
Finance: Compromising sustainability?
Despite the significant figures under discussion, it could only be a portion of the full problem: the report’s methodology clearly states that emissions associated with “insurance underwriting, the securities underwriting and advisory services of banks, or those in asset management assets classes other than fixed income and equity” were not factored in.
Interestingly, the WWF posits that UK finance should be reclassified as a high carbon sector “not dissimilar to oil and gas extraction, coal mining, aviation, and transport.” This could be highly compromising for the UK Government’s aim to be a leader on sustainability, particularly as it prepares to chair the COP26 this year.
Beyond voluntary pledges
The Paris Agreement stipulates that global average temperature increase be limited to 1.5°C, which in turn requires a 45% decrease from 2010 emissions levels by 2030. Both Greenpeace and WWF strongly suggest that voluntary pledges are evidently no longer sufficient to effect this necessary change.
“The UK financial sector could be the first in the world to be aligned with the Paris Agreement targets – and reap the rewards as global business shifts towards clean, green investments,” said Tanya Steele, CEO of WWF-UK.
John Sauven, Executive Director of Greenpeace UK, added, “As the host of this year’s pivotal global climate summit, the government can no longer turn a blind eye.
“Rather than relying on self-regulation, we need legislation that forces all banks and asset managers to align all financing activities with the goals of the Paris Agreement. That would be genuine climate leadership.”