Green MEP and Green Party finance speaker, Molly Scott Cato, has accused finance managers in the Investment and Pension industry of failing to take the issue of the ‘Carbon Bubble’ seriously – something she warns could lead to a future financial crisis – after many failed to attend a conference she organised in Bournemouth on the subject last week. The Carbon Bubble refers to the overvaluation of oil, gas and coal; fossil fuel assets which scientists say must remain unexploited if global warming is to be limited below 2°C.

The conference in Bournemouth, one of the largest centres in the UK for financial services, took place in the same week that Bank of England Governor, Mark Carney, issued an urgent warning about the risks the financial sector faces from climate change. He said UK investors faced exposure to ‘stranded assets’ and risked being ‘left exposed’ by a shift to a low carbon economy.

Responding to the absence of financial services professionals at the conference, Dr Scott Cato said:

“The Carbon Bubble is now a systemic risk threatening to destabilise the whole financial system. But it is also a risk for every single individual who holds investments, savings or has a pension. It seems the financial sector don’t want to face up to this looming crisis and are turning their backs on those whose investments they hold.”

Last year Green MEPs produced a detailed study into the money trail behind the Carbon Bubble. The report concluded that with carbon assets in Europe valued at over €1 trillion, a number of financial institutions and EU Member States are at risk, including some sizeable pension funds in the UK.

Last week it was revealed that local government in the UK invests £14 billion in fossil fuel companies. Green Party activists across the South West region have joined other divestment campaigners in calling for organisations, institutions and individuals to end their financial support for the fossil fuel industry.

Molly Scott Cato spoke to BBC radio [1] about the Carbon Bubble ahead of the Bournemouth conference. She said:

“Many people want their investments taken out of fossil fuel assets both because they are no longer secure assets and because they want the issue of climate change to be taken seriously. They don’t want to continue investing in institutions and companies that are wrecking our climate. They would also far rather see investments in assets that are going to hold their value for the long term. We’ve seen renewables bringing a good return whether its community renewables or pension funds. It’s time the financial services sector listened: we need to tell them to get our money out of fossil fuels.”

Notes

[1] http://www.bbc.co.uk/programmes/p0322zbc Speaking to BBC Solent reporter Tristan Pascoe, listen from 01:27:50 – 01:32:00

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