The Bank of England has been asked by campaign groups Positive Money and ShareAction as to what steps its pension fund is taking to address climate risks.

A joint letter, addressed to the Bank of England Pension Scheme chair of the trustees, John Footman, from Positive Money head of policy, David Clarke, and ShareAction senior campaigns manager, Lauren Peacock, put forward a number of questions scrutinising the scheme’s efforts to implement recommendations made by the Task Force on Climate-Related Financial Disclosures (TCFD).

The Bank of England is a founding signatory to the TCFD, which recommends that organisations disclose information about their management of climate risk through governance, strategy, metrics and targets. However, the campaign groups stated that it is unclear whether the Bank of England has adopted these recommendations for its own operations, including its pension scheme.

Climate risk refers to the financial risk of investing money in fossil fuel companies and projects, which could prove uneconomical in the long term due to legislation to reduce carbon emissions.

ShareAction senior campaigns officer, Lauren Peacock, stated: “Our central bank is in no short supply of lessons on the future impacts of climate change on our finance, lessons which have not gone unheard. The danger lies when the bank’s words are not backed up by meaningful transparency and action to protect our environment and the economy it serves. We’d be delighted to work with the bank to get its own house in order”.

The letter to the bank specifically asks which climate-related financial risks it is most concerned about, whether the scheme has formally considered climate change risk at board level, and if the board and its subcommittees have clear responsibilities for managing the financial risks from climate change.

In addition, the letters asks whether it has considered climate change-related risks, what action the scheme has taken to identify, measure, monitor, manage, and report on the scheme’s exposure to these risks, if it is planning to adopt the TCFD recommendations in the fund’s reporting, and whether it has consulted scheme members’ views on climate change.

Commenting, Positive Money executive director, Fran Boait, said: “The Bank of England has rightly recognised the existential threat that climate change poses to the financial system, and advises that financial firms disclose their efforts to address these risks. But astoundingly, these recommendations have not yet been adopted by the bank itself.

“The central bank needs to put its money where its mouth is and show leadership to the rest of Britain's financial system. Hardwiring sustainability into all of its operations, including its pension scheme, is the least it can do.”

The Bank of England declined to comment when contacted by Pensions Age.

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