Britain’s banking, finance, and asset management sectors are major contributors to climate change, according to a new report from Greenpeace and the WWF.

CO2 emissions from the UK finance sector’s global investments are nearly double the total for the whole of the UK. 

The report says that were the City a country, it would be the ninth-largest CO2 emitter in the world, at 805 million tonnes – more than Germany (776 million tonnes).

The figures come from climate solutions specialist South Pole and are based on a sample of 15 banks’ and 10 asset managers’ lending activities. 

The report’s authors are calling on the government to introduce new regulations to force the City into line with Paris Agreement targets.

The news comes as cryptocurrencies such as Bitcoin have been criticised for the environmental impact of proof-of-work blockchains, with mining for Bitcoin alone using more electricity than Malaysia or Sweden. 

Sixty-five percent of Bitcoin is mined in China, which generates 58 percent of its electricity from fossil fuels, though proponents of the currency say that many mining pools use electricity from renewable sources, or energy that would otherwise be wasted.

However, the comparison between traditional finance and the emerging digital ecosystem is inexact: the CO2 emissions cited in the UK report are not rooted in the energy consumption of the City itself, but in the carbon emissions that it is financing worldwide, including those of the oil industry.

Executive director of Greenpeace UK, John Sauven, described the financial sector as “the UK’s dirty little secret”.

He added, “How can we say we’re ‘leading the world on climate action’ while allowing financial institutions to plough billions into fossil fuel production every year? The claim is almost laughable.”

A spokesperson for UK Finance responded that the City is taking a “leading role in the shift to Net Zero finance”. In April, the UK’s six biggest lenders committed to Net Zero emissions from their portfolios by 2050 at the latest.

According to a 2014 report for the European Parliament, five of those companies – HSBC, Barclays, Santander, The Royal Bank of Scotland, and Lloyds – at that time had more than £66 billion invested in oil, gas, and coal extraction within the UK alone.

Moves are afoot in the UK to tackle the problem. In February, the government announced that Leeds and London would become home to a new UK centre for global green finance and investment. 

The UK Centre for Greening Finance and Investment (CGFI) went live in April.

As previously reported on Transform Finance, the new global initiative is designed to “encourage financial services to turn the tide of their investments and focus on sectors and companies that have a smaller environmental footprint.”

Through it, banks, other lenders, and insurers will be urged to invest in clean innovations and green technologies, including sustainable agriculture and energy from renewable resources.

At the 15 February announcement, the Bank of England’s executive sponsor for work on climate change, Sarah Breeden, said, “Integrating climate and environmental data and analytics into decision-making will allow financial institutions to identify, measure, and manage the financial risks and opportunities from climate change, and so support the Bank’s objective to ensure the financial system is resilient to these risks and supportive of the transition to Net Zero.”