Bank of England under pressure over board member's oil links
Environmental groups have called into question the Bank of England’s commitment to tackling the climate emergency while it retains one of Britain’s most senior oil company executives on its governing board.
Greenpeace joined with Friends of the Earth and the campaign group Oil Change International (OCI) to condemn the role played on the Bank’s board of directors by Dorothy Thompson, the executive chair of Britain’s largest independent oil company, Tullow Oil.
Thompson was appointed to Threadneedle Street in 2014, when she was the head of power station operator Drax Group. She is a senior non-executive on the Bank’s board, known as the Court of Directors, and chairs the audit and risk committee.
Criticism of Thompson’s role is embarrassing for Mark Carney, who steps down as governor next month to become Boris Johnson’s special adviser for the crucial Cop26 climate conference in Glasgow in November.
Britain is hosting the climate conference as governments come under pressure to explain how they plan to cut fossil fuel emissions, especially from the widespread use of oil and oil products such as plastic.
Carney has also been appointed as UN special envoy for climate action and finance, replacing the billionaire Michael Bloomberg in the part-time pro bono climate action role.
Rosie Rogers, the head of climate finance at Greenpeace UK, said the Bank was “central to tackling the climate emergency” and that Carney needed to be “making the best decisions possible for the planet free from the influence of the fossil fuel industry”.
Hannah McKinnon, the director, energy transitions and futures programme at the OCI, said: “Central banks are charged with overseeing and regulating one of the greatest transitions of our time: the end of the fossil fuel economy. It’s a conflict of interest for the Bank of England to have fossil fuel executives on its Court of Directors.”
Rachel Kennerley, a climate campaigner at Friends of the Earth, said: “While the world grapples with the severity of the climate crisis and young people take to the streets for their future, our country’s finances remain too tightly aligned with climate-wreaking oil and gas companies. Climate breakdown needs to be fought in every arena which can only mean cutting ties between financial institutions and dirty oil companies.”
The Bank of England is known to be concerned to protect its environmental credentials after converting to renewable energy at its Threadneedle Street headquarters and introducing schemes to reduce business travel by its staff and recycle banknotes.
Carney is most closely associated with a UN-backed campaign that aims to encourage businesses to show how they will reduce their carbon footprint over the next two decades to restrict the rise in global temperatures to 1.5C of pre-industrial levels.
Earlier this month, Carney said that when world leaders meet in Scotland for UN-led climate talks they needed to show they had a plan to reduce carbon emissions.
“It’s not just green assets and divestment campaigns or certain things are so brown or black. Every company ultimately has to have a plan for a transition and what the opportunities are and where the risks are,” he said.
As chief executive of Drax, Thompson was applauded for switching the electricity generator from coal to biofuels and introducing measures to reduce harmful gas emissions. Drax has pledged to be carbon negative by 2030.
Tullow Oil is a £550m oil and gas company that explores and produces oil at sites in Kenya, Ghana and Uganda. It has also explored for oil off the coast of Guyana.
Thompson stepped up from her role as non-executive chair of Tullow in December after she and other nonexecutives ousted the chief executive and the head of exploration for poor performance.
Tullow has pledged to reduce the level of CO2 emissions per tonne of hydrocarbon it extracts from its wells, but the most recent figure for 2018 – 139 tonnes per 1,000 tonnes of hydrocarbon produced, while lower than in 2017 – is higher than 2015.
The Bank of England and Tullow Oil declined to comment.