Bank warned anti-green quantitative easing was “moral hazard”

“He has a moral responsibility to align his corporate bond purchasing program with the goals of the Paris Agreement,” said Philip Dunne, Conservative MP and committee chair.

“We are at a critical point not only to mitigate the effects of climate change, but to save large swathes of the economy from the impacts of successive coronavirus lockdowns. “It makes sense to tackle the two together, offering a ‘reset button’ to design an economy worthy of Britain to net zero.”

Mr Dunne said the quantitative easing program is “currently aligned with a catastrophic 3.5 ° C temperature rise by 2100”, noting that the bank’s financial stability mandate also includes climate risks .

The EAC also urged the Bank to require companies using its Covid loan support to “publish climate-related financial information” highlighting their exposure to rising temperatures.

The Bank said it would “fully respond” to the committee’s letter in due course, but insisted that “climate change is a strategic priority”.

He added: “Work to determine how best to take climate considerations into account in our corporate bond portfolio is already underway at the Bank.”

The Bank became the first central bank to begin stress testing its banking and insurance sectors against the impact of climate change.

Investor control over the financing of carbon emissions by banks has increased in recent years as the city’s climate concerns increase. The Bank itself has warned investors that they risk being hit by a “Minsky moment” when an asset price collapse is triggered by the climate crisis.