Investments in “unsustainable” and “high-carbon” industries

Climate Change Capital Ltd. said it joined a group of more than 20 investors, academics and environmental campaign groups urging the Bank of England to probe the U.K’s exposure to investments in “unsustainable” and “high-carbon” industries. Banks, funds and institutional investors may end up with “stranded assets and poor returns” because of investments in industries with high carbon emissions, the groups said today in a letter to Bank of England Governor Mervyn King that was e- mailed by Climate Change Capital. Signatories include Aviva Investors Chief Executive Officer Paul Abberley. “The depth and breadth of our collective financial exposure to high carbon, extractive and environmentally unsustainable investments could become a major problem as we transition to a low carbon economy,” the letter’s authors said. Five of the 10 biggest companies in the U.K.’s benchmark stock index, the FTSE 100, were “almost exclusively high-carbon” in July, they said. The value of U.K. pensions could be at risk because of investments that may lose value as “policy and technology work consistently over time to reduce returns in high carbon areas while supporting low carbon ones,” according to the letter. It urged policy makers on the Bank of England’s Financial Policy Committee to assess the risks and devise options for addressing any threats identified. Other signatories include Conservative Party lawmaker Zac Goldsmith; Solarcentury Holdings Ltd. Chairman Jeremy Leggett, Penny Shepherd; the U.K. Sustainable Investment and Finance Association; and David King, former chief government scientific adviser and now director of Oxford University’s Smith School of Enterprise and the Environment. The U.K. heads of the environmental groups Greenpeace and WWF also put their names to the text. A spokesman for the central bank confirmed it had received the letter and offered no further comment.