Labour Party’s John McDonnell, the acting chancellor, laid down a radical plan saying that the corporations that do not respond to and tackle the climate crisis will be delisted from the London Stock Exchange if the party comes to power.
In the run-up to the upcoming UK elections, making environmental crisis the priority of the party, McDonnell promised that under their government, they would ensure that companies are “pulling their weight” to tackle the “existential threat” to the planet.
This would mean that the Corporate Governance Code will be amended to “set out a minimum standard for listing related to evidencing the action being taken to tackle climate change,” McDonnell was quoted by Public Wire.
In his statement, McDonnell promised that “a step-change in corporate governance and regulation that will support efforts to tackle the climate emergency.”
“If we are meet the climate change target to keep global warming to 1.5 degrees above pre-industrial levels, we need to ensure that companies are pulling their weight alongside government,” he said at an event in London.
This statement comes after Green Party criticised the Labour Party for dropping plans to achieve net zero carbon emissions by 2030, after a shadow cabinet minister revealed on Monday.
Earlier in June this year, the shadow chancellor, had announced proposals for an unprecedented expansion of the central bank’s role at the heart of policymaking, with officials at Threadneedle Street (Bank of England) supporting the Treasury in checking on progress towards carbon targets. This was reiterated by Mark Carney, the governor of the Bank of England in October.
“There will be industries, sectors and firms that do very well during this process because they will be part of the solution,” Carney was quoted by The Guardian.
“But there will also be ones that lag behind and they will be punished,” he added.
The central bank governor said that the transition to net zero carbon emissions would change the value of every asset, raising the risk of shocks to the financial system.
The shadow chancellor stood by his controversial plan to force all large companies to give staff shares in their firms and pay dividends.
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