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Can central banks help fight climate change?

Now the Bank of England is supporting the government’s net-zero target, will other central banks follow suit?

By Megan Greene   May 2021

The Bank of England. Photo: Alex Segre / Alamy Stock Photo

The most important nugget in Rishi Sunak’s March budget was not the size of ongoing stimulus measures nor the nod at retrenchment to come. It was the chancellor’s announcement that the Bank of England’s mandate will now include supporting the government’s net-zero emissions target. This move marks a sea change for central banks.

It’s not surprising that the UK is ahead of the pack in taking this step. The BoE led the way in encouraging corporate disclosure of climate risk and will soon conduct climate-related stress tests. It is relatively uncontroversial to assert that central banks have a…

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