Bank of England fails on climate as Arctic hotter than ever

Written by Lori Campbell on 22nd Jun 2020

The Bank of England admits that the carbon emission footprints of its bond holdings are not aligned with the Paris climate goals as the Arctic records its hottest temperature ever. Meanwhile, a hydrogen-powered train is to run on the UK main line for the first time, the world’s biggest liquid air battery is to be built near Manchester and a Danish fund raises 1.5 billion euros (£1.36 billion) for renewable energy infrastructure investments. It’s the Good With Money news brief.

Bank of England admits bond portfolio fails on climate goals

The Bank of England has admitted that its corporate bond holdings have carbon emission footprints that are not aligned with the Paris climate goals.

The bank has published for the first time its assessment of the climate risks it faces, in line with the Task Force on Climate-related Financial Disclosures. It is now urging other financial institutions to follow suit. Andrew Bailey, the bank’s governor, said it was “vital the bank continues to lead on the financial risks from climate change”.

The assessment considers climate risks to the bank’s asset portfolio, most of which comprises about £500 million of UK government bonds. It said its portfolio was therefore “materially aligned with that of the UK”, which had a low carbon footprint relative to other G7 nations, but needed to go further to meet climate goals.

A further £10 billion is invested in corporate bonds, which include or have included debt raised by oil companies such as BP. Mr Bailey said there remains “a gap between the associated carbon outputs of these holdings and the Paris goals”.

It comes as the Vatican urges Catholics to drop investments in fossil fuels and arms.


Three new sustainable investment funds for 2020


Arctic records its hottest temperature ever

A searing heatwave has led to temperatures of 100.4 degrees Fahrenheit (38 Celsius) being reported in the Siberian Arctic, typically one of the coldest places on Earth.

If verified, it will go down as the hottest temperature ever recorded north of the Arctic Circle as well as in the Siberia region of Russia. Putting it into perspective, Miami in Florida has only reached 100 degrees once since the city began keeping temperature records in 1896.

The temperature was recorded on 20 June in the small town of Verkhoyansk and was 32 degrees above the normal high temperature.

The Arctic is warming at more than two times the average rate of the world as heat traps greenhouse gases that result from the burning of fossil fuels. This phenomenon is known as Arctic Amplification, which is leading to the decline of sea ice, and in some cases snow cover.

Sign up to our weekly newsletter

Get better with money, in every way.

Full steam ahead for train that runs on hydrogen

A train powered by hydrogen will run on the main line for the first time under plans to reduce reliance on diesel.

Full trials of a hydrogen train – called the “HydroFlex” – are to start within weeks and it could pull passenger trains late next year. The technology is being developed by the University of Birmingham alongside Porterbrook, a rolling-stock company.

The government has given the consortium a £400,000 grant to develop and test the HydroFlex. The trial will take place from the group’s base at Long Marston in Warwickshire, and run on the North Cotswold Line between Oxford and Hereford.

The technology uses hydrogen and oxygen to generate electrical energy that can power the train. It can also be powered by electricity from overhead cables where they exist.


Is your city a climate A-lister?


UK to build world’s biggest liquid air battery

The world’s largest liquid air battery, which will store renewable electricity and reduce carbon emissions from fossil-fuel power plants, is being built in the UK. The project near Manchester will use spare green energy to compress air into a liquid and store it. When demand is higher, the liquid air is released back into a gas, powering a turbine that puts the green energy back into the grid.
A big expansion of wind and solar energy is vital to tackle the climate emergency but as they are not always available, storage is key. The new project will be the largest in the world outside of pumped hydro schemes, which require a mountain reservoir to store water.
The new liquid air battery, being developed by Highview Power, is due to be operational in 2022. It will be able to power up to 200,000 homes for five hours, and store power for many weeks.

Danish fund raises £1.36 billion for green energy

A Danish fund has raised 1.5 billion euros (£1.36 billion) for renewable energy infrastructure investments, as it aims to be the biggest in the world of its kind.

The successful first close of the fund from Copenhagen Infrastructure Partners is a sign that investors are still keen to spend money on green assets even as the global economy faces significant uncertainty due to the coronavirus pandemic.

“When you look at different assets during the current coronavirus crisis, renewable energy assets have been competitive with gas and coal,” said Michael Hannibal, a partner at CIP.

The Danish fund manager expects to raise as much as seven billion euros from global investors for its Copenhagen Infrastructure IV fund.

Hannibal says the firm will invest a third of the funds in offshore wind farms, one third in onshore wind and solar and the final third in technologies like biomass, waste-to-energy, transmission and storage solutions. The investments will be split roughly between Europe, the U.S. and Asia.