The Lord Bishop of Manchester

My Lords, financial stability is crucial for sustainable growth. It is what allows people and families to plan for the future, to reliably hold savings, pensions and mortgages, and of course it supports businesses to create the jobs on which we depend. In the same way, financial growth and environmental stewardship are interdependent. Growth provides us with resources that allow us to invest in new sustainable fuels, clean infrastructure and new ways to tackle the climate crisis. It goes both ways. The climate crisis, which many of us now call the climate emergency, also threatens financial stability. Increasing extreme weather events may well reduce access to insurance for both households and businesses, as the noble Baroness, Lady Hayman, has already reminded us. As we face the prospect that the heatwaves of this summer become the new normal, agricultural assets are already projected to be affected by drought, impacting on our farmers. Yet these risks have a disproportionate impact on the most vulnerable. Financial shocks hit hardest for those who have no savings to fall back on. Food shortages load further pressure on to those who are already going hungry. The amendments in this group seek to recognise that interdependence between a stable environment and stable financial markets and services. A little bit later, we will hear about amendments from the noble Baroness, Lady Hayman, that would require financial institutions to develop credible transition plans consistent with the Paris Agreement’s 1.5-degree target—if it is not already too late for that. Prevention is of the utmost importance if we are to stop the worst impacts of global warming before opportunity lapses. Prevention must go hand in hand with preparedness. We are already feeling the impact of climate change at home, and we must do all that we can to supplement preventive work with measures that allow us to adapt for this changing reality. As the then chair of the Church of England’s ethical investment advisory group and deputy chair of the Church Commissioners for England, it was my privilege to be present at the opening of the London Stock Exchange when we launched, with support from FTSE, the first index that was weighted towards environmental issues. These voluntary measures enable investors who need to track indices to take environmental factors into account. I doubt that many of us here in your Lordships’ House today believe that voluntary action alone is going to solve the climate crisis. Amendment 34, to which I have added my name, would, as the noble Baroness has already said, create a responsibility for regulators to consider the effects of climate change in their decision-making, in the same way as they would any other significant financial risk. That is an important step towards ensuring that our financial institutions are resilient in the face of the growing risks posed by global warming, and that financial services continue to serve the needs of consumers as we pursue prevention on a wider scale. If we are not to place the amendments in this group in the Bill, will the Minister please explain—as I know others have already asked—how the Government intend to ensure financial services and markets do not develop without regard to their environmental impact?