A recent update to the remit of the Monetary Policy Committee (MPC) requires us to consider how, subject to achieving our inflation target, we might support the transition of the UK economy to net zero emissions by 2050.
An important first step is considering how to ‘green’ the Corporate Bond Purchase Scheme (CBPS), using our balance sheet to incentivise bond issuers to support transition, and encourage other investors to do likewise.
The purpose of this Discussion Paper is to seek feedback on the principles that might guide how best to incentivise transition to net zero via the CBPS; and the tools we might use to do it. It highlights some of the key challenges and design choices we will need to grapple with ahead of implementing any changes later this year, setting out a number of questions on which we would be especially interested to hear views.
With thinking on climate conscious investing developing rapidly, we were keen to hear from a wide range of respondents on the proposals and questions posed in this paper, including: firms that issue debt; investors; academics; advocacy groups; international organisations; and the public. The Discussion Paper was open to written responses from the public until 2 July 2021. In addition, the Bank conducted discussions with a wide range of stakeholders, including a public webinar held on 29 June.
In coming weeks we will hold a range of virtual events to facilitate further discussion with a subset of respondents and existing contacts.