Investors and regulators can help the UK reach its ambitious goals to cut carbon emissions by being more curious about where their money is invested, Abundance managing director and co-founder Bruce Davis has said.
The UK recently announced new plans to reduce carbon emissions by at least 68 per cent by 2030 compared with 1990 levels.
This forms part of the country’s commitment to reach net zero emissions by 2050.
But Davis has suggested that the financial sector could do more to help by looking where the money in savings is being invested by banks.
“Money is never idle, whether in cash form or in a cash deposit but with the legislation now in place committing the UK to net zero by 2050 we should be asking how our money is being used to help or hinder that aim,” he said.
“We are similarly lacking in curiosity about the almost £200bn which has been put in the savings account of the UK government from quantitative easing and which is used to fund a range of investments and infrastructure.”
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Davis said the Financial Conduct Authority (FCA) should be focusing on both the function and purpose of money.
The FCA should be worrying much more about whether finance is also achieving the common purpose we have for our money and not simply focus on narrow concepts of individual financial need,” he said.
“The danger is that they create a paradox of thrift which means the whole of the economy and the consumers they are seeking to protect are actually worse off.”