The Bank of England does not have enough evidence to order banks and insurers to hold more capital to cover risks from climate change, the central bank's Deputy Governor Sam Woods said on Thursday.
While Mr Woods said the bank was exploring the extent it should reflect climate risks and capital requirement, it currently does not have the proof that certain products, such as mortgages, should carry a higher risk weight because of their climate risk.
“We just don't have that,” Mr Woods told delegates attending a Climate Action Week event hosted by the Bankers for Net Zero initiative.
“The evidence at the moment is a bit more macro,” he said, and looks at “the way climate is going to affect economies and sectors, and how might that feed through”.
The transition to net zero is key for the financial sector in the year the UK holds the twin presidency of the G7 and the Cop26 environment summit in Glasgow.
The Glasgow Financial Alliance for Net Zero, formed in April, has 43 founding members including banks such as Barclays, HSBC and Lloyds, which have all pledged to reach net-zero emissions across their businesses by 2050 and to publish details of how they will achieve this between 2022 and 2030.
With the UN’s special envoy on climate action Mark Carney urging more international lenders to join the Alliance ahead of Cop26, the regulatory system is also under scrutiny to ensure it will support, rather than hinder, the financial sector’s bid to achieve its net-zero ambitions.
Mr Woods said that over time he expects the price banks charge polluting industries for loans will go up to reflect the risks from climate change.
"When we look around today we can try and find evidence of those risks being factored into prices ... we can't see much.”
He said climate activists may “quite rightly” question why the central bank is not enforcing this policy yet, but stressed that it should not do that until the bank has the evidence.
Mr Woods, whose second term as deputy governor of the Bank of England and as chief executive of the Prudential Regulation Authority started last month, said the bank has a number of green objectives.
These include improving the understanding of climate-related financial risks right across the financial system and the wider economy, developing and embedding climate risk financial management within the companies that it regulates and seeking to achieve best practice in its own right as an institution.
Mr Woods made it clear that the bank’s role was to assist with the transition of the financial services sector to net zero, rather than to dictate policy.
When asked whether the bank will commit to blacklisting fossil fuel companies from its corporate bond purchase scheme, Mr Woods said the answer was “no”.
Instead he said the bank will take “a nuanced approach”, which may “prove unsatisfying" to those that think the regulator should go further.
“We’re going to look at how can we move the weighted average carbon intensity of our portfolio through time … what targets we want to set for that, what requirements do we want to set for firms within our portfolio in terms of what we expect them to do, but not least in terms of what we expect them to disclose,” said Mr Woods.
He then said the bank would “tilt through time” more in favour of those firms who are making progress.
“All of that is a very different approach from the approach that just says, OK, these firms are bad for the climate, we boot them out, and these other firms are good and we keep them.”
Mr Woods said this stance is key because buying bonds is a tool of monetary policy, so it is not only about pushing climate change along.
The other reason for this approach, he said, is because the BoE "does not believe philosophically that that's the right way to go".
“We want firms across markets to improve and we want there to be pressure on them to do that", he said. “We think a better way to do that is to put incentives in place which require firms, even those in carbon-intensive industries to become less carbon intensive, rather than just chuck them out.”
The BoE doubled its bond purchase target to £895 billion ($1.24bn) in November last year to help bolster the UK economy against its biggest recession in 300 years, after the country almost completely shut down at the start of the pandemic last year.
At the time, BoE governor Andrew Bailey said the UK has not abandoned its commitment to climate change despite the “stark decisions” it was forced to make to tackle the Covid-19 crisis.
Mr Bailey said the regulator decided to prioritise people’s jobs, livelihoods and businesses at the start of the crisis, and these short-term interventions did not “discriminate on the basis of climate change”.
Environmental groups have criticised the BoE for including bonds issued by energy companies and other businesses with significant greenhouse gas emissions in asset purchase programmes designed to support the economy.
When asked if the bank should use the powers it has to discourage companies from fossil fuel exploration and exploitation by raising the cost of capital, Mr Woods said it would be "overreach" for the bank to adopt this stance.
“I think it's a decision for our elected officials as to what to do in that kind of a space, I don't think the central bank should say, OK we've decided that we need to worry about climate and therefore, we're going to somehow directly use our powers to penalise the flow of finance towards carbon-heavy Industries", he said.
“What we can do … together with politicians .. is say to the firms that we regulate, that first of all, you need to have an understanding of what your exposures look like in this respect and … how could that affect you. In light of that, how can you demonstrate to us that you are appropriately capitalised for those risks, and that you're on top of that? I think that is appropriate."
What is Folia?
Prince Khaled bin Alwaleed bin Talal's new plant-based menu will launch at Four Seasons hotels in Dubai this November. A desire to cater to people looking for clean, healthy meals beyond green salad is what inspired Prince Khaled and American celebrity chef Matthew Kenney to create Folia. The word means "from the leaves" in Latin, and the exclusive menu offers fine plant-based cuisine across Four Seasons properties in Los Angeles, Bahrain and, soon, Dubai.
Kenney specialises in vegan cuisine and is the founder of Plant Food Wine and 20 other restaurants worldwide. "I’ve always appreciated Matthew’s work," says the Saudi royal. "He has a singular culinary talent and his approach to plant-based dining is prescient and unrivalled. I was a fan of his long before we established our professional relationship."
Folia first launched at The Four Seasons Hotel Los Angeles at Beverly Hills in July 2018. It is available at the poolside Cabana Restaurant and for in-room dining across the property, as well as in its private event space. The food is vibrant and colourful, full of fresh dishes such as the hearts of palm ceviche with California fruit, vegetables and edible flowers; green hearb tacos filled with roasted squash and king oyster barbacoa; and a savoury coconut cream pie with macadamia crust.
In March 2019, the Folia menu reached Gulf shores, as it was introduced at the Four Seasons Hotel Bahrain Bay, where it is served at the Bay View Lounge. Next, on Tuesday, November 1 – also known as World Vegan Day – it will come to the UAE, to the Four Seasons Resort Dubai at Jumeirah Beach and the Four Seasons DIFC, both properties Prince Khaled has spent "considerable time at and love".
There are also plans to take Folia to several more locations throughout the Middle East and Europe.
While health-conscious diners will be attracted to the concept, Prince Khaled is careful to stress Folia is "not meant for a specific subset of customers. It is meant for everyone who wants a culinary experience without the negative impact that eating out so often comes with."
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
The%20specs
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What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Company%20Profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Cargoz%3Cbr%3E%3Cstrong%3EDate%20started%3A%3C%2Fstrong%3E%20January%202022%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Premlal%20Pullisserry%20and%20Lijo%20Antony%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%2030%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Seed%3C%2Fp%3E%0A
The%20specs
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UAE - India ties
The UAE is India’s third-largest trade partner after the US and China
Annual bilateral trade between India and the UAE has crossed US$ 60 billion
The UAE is the fourth-largest exporter of crude oil for India
Indians comprise the largest community with 3.3 million residents in the UAE
Indian Prime Minister Narendra Modi first visited the UAE in August 2015
His visit on August 23-24 will be the third in four years
Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, visited India in February 2016
Sheikh Mohamed was the chief guest at India’s Republic Day celebrations in January 2017
Modi will visit Bahrain on August 24-25
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 247hp at 6,500rpm
Torque: 370Nm from 1,500-3,500rpm
Transmission: 10-speed auto
Fuel consumption: 7.8L/100km
Price: from Dh94,900
On sale: now
Mohammed bin Zayed Majlis
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
Cinco in numbers
Dh3.7 million
The estimated cost of Victoria Swarovski’s gem-encrusted Michael Cinco wedding gown
46
The number, in kilograms, that Swarovski’s wedding gown weighed.
1,000
The hours it took to create Cinco’s vermillion petal gown, as seen in his atelier [note, is the one he’s playing with in the corner of a room]
50
How many looks Cinco has created in a new collection to celebrate Ballet Philippines’ 50th birthday
3,000
The hours needed to create the butterfly gown worn by Aishwarya Rai to the 2018 Cannes Film Festival.
1.1 million
The number of followers that Michael Cinco’s Instagram account has garnered.
Avatar%3A%20The%20Way%20of%20Water
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Bangladesh tour of Pakistan
January 24 – First T20, Lahore
January 25 – Second T20, Lahore
January 27 – Third T20, Lahore
February 7-11 – First Test, Rawalpindi
April 3 – One-off ODI, Karachi
April 5-9 – Second Test, Karachi
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
Company%20profile
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CONFIRMED%20LINE-UP
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MATCH INFO
What: 2006 World Cup quarter-final
When: July 1
Where: Gelsenkirchen Stadium, Gelsenkirchen, Germany
Result:
England 0 Portugal 0
(Portugal win 3-1 on penalties)
Januzaj's club record
Manchester United 50 appearances, 5 goals
Borussia Dortmund (loan) 6 appearances, 0 goals
Sunderland (loan) 25 appearances, 0 goals
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How to vote
Canadians living in the UAE can register to vote online and be added to the International Register of Electors.
They'll then be sent a special ballot voting kit by mail either to their address, the Consulate General of Canada to the UAE in Dubai or The Embassy of Canada in Abu Dhabi
Registered voters mark the ballot with their choice and must send it back by 6pm Eastern time on October 21 (2am next Friday)
'Doctor Strange in the Multiverse Of Madness'
Director: Sam Raimi
Cast: Benedict Cumberbatch, Elizabeth Olsen, Chiwetel Ejiofor, Benedict Wong, Xochitl Gomez, Michael Stuhlbarg and Rachel McAdams
Rating: 3/5
Know before you go
- Jebel Akhdar is a two-hour drive from Muscat airport or a six-hour drive from Dubai. It’s impossible to visit by car unless you have a 4x4. Phone ahead to the hotel to arrange a transfer.
- If you’re driving, make sure your insurance covers Oman.
- By air: Budget airlines Air Arabia, Flydubai and SalamAir offer direct routes to Muscat from the UAE.
- Tourists from the Emirates (UAE nationals not included) must apply for an Omani visa online before arrival at evisa.rop.gov.om. The process typically takes several days.
- Flash floods are probable due to the terrain and a lack of drainage. Always check the weather before venturing into any canyons or other remote areas and identify a plan of escape that includes high ground, shelter and parking where your car won’t be overtaken by sudden downpours.
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
Types of fraud
Phishing: Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
Smishing: The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
Vishing: The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
SIM swap: Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
Identity theft: Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
Prize scams: Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
* Nada El Sawy
