Financial Services Bill — House of Lords, 2021-01-28
Topic: Environment
Shaista Sheehan (Liberal Democrats, Centre to centre-left): My Lords, I congratulate the noble Lord, Lord Hammond, and the noble Baroness, Lady Shafik, on two of the most enjoyable maiden speeches that I have heard. I look forward to their future contributions in the House My contribution to today’s debate will very much reflect the views of the noble Baroness, Lady Hayman, my noble friend Lord Oates and a couple of other noble Lords who have mentioned climate change. Just yesterday we heard of an ingenious global survey carried out by a UN agency, the UNDP, to gauge opinion from around the world on climate change. The findings were really quite fascinating. The first thing to note is that by placing polls in mobile gaming networks the UNDP was able to get over 500,000 youngsters under 18 to take part. They are the ones who will have to live with the consequences of our action—or indeed inaction—today, and therefore their voices and opinions must be heard, especially by us here in the UK, who, at this crucial juncture of make-or-break climate policy, hold the leadership of the biggest opportunity, in COP 26, to steer the global tanker towards a clearer, greener horizon In this biggest-ever climate poll, almost two-thirds of the over 1.2 million people surveyed worldwide said that climate change is a global emergency and urged our leaders to greater action to address the crisis in all sectors. For instance, in eight of the 10 surveyed countries with the highest emissions from the power sector, the majority backed more renewable energy; in four of the five countries with the highest emissions from land use change, the majority supported conserving forests and land; and nine out of 10 of the countries with the most urbanised populations backed more use of clean electric cars and buses and bicycles Britain, as it reshapes its investment and legislative landscape post Brexit, in the same year in which it hosts the seminal COP 26 climate summit, must embrace its mantle of climate leadership. Therefore every Act of Parliament dated 2021 must acknowledge somewhere within its makeup that we recognise the importance of our actions today for the generations that will follow us. Environmental, social and governance—ESG— considerations must be pervasive through all Bills, especially the one that underpins our economic and financial well-being and stability and which will define the big future investment decisions that will affect us all for decades to come The sad fact is that, despite an ever-increasing number of commitments from banks and other financial sector actors to align their activities with the Paris agreement, recent research has found that, for example, lending to fossil-fuel-linked investments by 35 of the biggest global banks continues to rise: $736 billion in 2019, up from $700 billion the year before. The movement is in the wrong direction Part of the reason why financial institutions are not moving fast enough to help to prevent catastrophic climate change is that regulators and policy-making departments do not sufficiently consider climate and environmental impacts. For example, in the Treasury’s impact assessment for the Bill before us today, greenhouse gas impacts are listed as "not applicable" even though significant changes to how investment funds behave, the centrepiece of the Bill, are bound to have such impacts. That is unacceptable I will be lending my support to amendments working towards ensuring that regulations and financial sector policy-makers take climate change, our natural capital and the UK’s international commitments on these issues into account when setting regulations and making policy. Of course a stronger indication of government policy intent towards meeting their net-zero target would be the imposition of a green capital requirement, a move that I would welcome, as I would a requirement for the Government to review the impact of the Bill on meeting the Paris agreement commitments. I look forward to seeing those amendments.