Banks and hedge funds ‘financing climate change’ to be targeted by Labour

The Labour Party is developing plans to "go after" banks and hedge funds "financing climate change".

While the Conservatives have a legally binding target to achieve a zero carbon economy by 2050, shadow chancellor John McDonnell wants the goal reached by the 2030s using financial levers.

Mr McDonnell revealed his approach ahead of the publication of the Finance and Climate Change report, authored by a group including academics and experts as well as former head of the civil service, Bob Kerslake.

The report recommends banks and hedge funds "should be forced to publish the climate-related risks associated with their financial assets".

Air pollution above Birmingham
Air pollution above Birmingham

Mr McDonnell said: "It's clear there is a long way to go before the finance sector is pulling its weight to achieve the rapid changes our economy needs to meet our climate obligations."

"Labour will take on board these findings and recommendations and bring forward our own proposals ahead of the General Election."

The report will also recommend that the Bank of England change its monetary policy operations to "avoid carbon bias" and said larger banks should penalised for involvement in environmentally unfriendly investments.

Labour leader Jeremy Corbyn this week attacked polluters from hedge funds and large companies.

The party also pledged that all new homes would be "zero carbon" within three years under Labour plans to tackle the housing and climate crises at the same time.