IN A CONTROVERSIAL speech the Bank of England (BoE) warned that insurance companies could face a ‘huge hit’ if any real action was taken on climate change.
Paul Fisher, deputy head of the BoE’s Prudential Regulation Authority (PRA) spoke ahead of the UN climate change summit in December, saying insurers investing in fossil fuel assets could be left "stranded" by policy changes which limit their use.
"As the world increasingly limits carbon emissions, and moves to alternative energy sources, investments in fossil fuels and related technologies, a growing financial market in recent decades, may take a huge hit," Fisher told an Economics conference.
"There are already a few specific examples of this having happened."
The BoE has been analysing the risks and will deliver a report to the government later this year.
"We are seeking to understand how these changes may impact upon the PRA's objectives and how that could shape our role going forward," Fisher said.