Section:GDN 1N PaGe:31 Edition Date:190812 Edition:01 Zone: Sent at 11/8/2019 19:48 cYanmaGentaYellowb
Monday 12 Aug ust 2019 The Guardian •
3131Jillian AmbroseBritain’s biggest companies, investors
and pension funds must come clean on
the fi nancial risks they face as a result
of the climate crisis, MPs have said.
The environmental audit commit-
tee (EAC) has called for the City to face
mandatory climate reporting within
the next three years to avoid jeopard-
ising hundreds of billions of pounds’
worth of pension savings.
The cross-party committee crit-
icised ministers for failing to take
specifi c steps to drive forward cli-
mate disclosure plans, despite their
publicly supporting international
recommendations.
The MPs also urged the government
to clarify in law that pension funds
have a duty to take into account long-
term environmental risks.
The report comes weeks after
the Treasury outlined plans to forcecompanies and funds to show how the
climate emergency could jeopardise
fi nances.
The EAC said it did not believe a
voluntary approach would be eff ec-
tive and instead called for climate risk
reporting to be mandatory on a “com-
ply or explain” basis. The new plans
would take eff ect by 2022, and include
fi nancial services fi rms.
Mary Creagh, who chairs the EAC,
said: “Climate change poses fi nancial
risks to a range of investments – from
food and farming, to infrastructure,
construction and insurance liability.”
The committee’s report on “green-
ing finance” found that the UK’s
financial investment chain was
“structurally incentivised” to prior-
itise short-term profi ts rather than
long-term issues including the cli-
mate crisis.
“We need to fi x the incentives in our
fi nancial system that encourage short
term thinking. Long-term sustaina-
bility must be factored into fi nancialdecision-making,” Creagh said. “We
want to see mandatory climate risk
reporting and a clarifi cation in law
that pension trustees have a duty to
consider long-term sustainability, not
just short-term returns .”
The calls for mandatory climate
reporting come after the government
legislated an economy-wide target to
reduce carbon emissions to net-zero
by 2050. Creagh said the low-carbon
transition “also presents exciting
opportunities in clean energy, trans-
port and tech that could benefi t UK
businesses”.
The EAC said: “Proper recog nition
and disclosure of these risks and
opportunities would help fi nancial
markets work more effi ciently andwill enable UK institutions and inves-
tors to position themselves to benefi t
from the low-carbon transition .” It also
called for pension savers to have a say
in how their money is invested by forc-
ing pension funds to actively seek the
views of their benefi ciaries when they
set their investment principles.
The governor of the Bank of England
has warned that the global fi nancial
system faces an existential threat from
climate change and must “raise the
bar” to avoid catastrophe.
In an open letter to the Guardian in
April, Mark Carney and François Vil-
leroy de Galhau, the governor of the
Banque de France, urged fi nancial reg-
ulators around the world to carry out
climate crisis stress tests to spot any
risks in the system, and called for a
“massive reallocation of capital” to
prevent global warming above the 2C
maximum target set by the Paris cli-
mate agreement. “If some companies
and industries fail to adjust to this new
world, they will fail to exist,” they said.
Insurers already face growing losses
from more frequent catastrophic
weather events such as heatwaves,
droughts, fl oods and hurricanes.
Banks could suff er from major asset
write-off s as assets could turn out to be
worthless if they are reliant on burning
fossil fuels. Threadneedle Street has
said as much as £15 tn of assets could
be wiped out by climate change.£15tn
The value of company assets that
the Bank of England says could be
wiped out by the climate crisisSSE in talks to
sell household
energy arm to
upstart Ovo
Julia KolleweSSE, the UK’s second -biggest energy
company, which supplies almost 6
million households, is in talks to sell
its household supply business to its
upstart rival Ovo Energy.
If a deal is fi nalised, it would cat-
apult Ovo – founded a decade ago in
Bristol by Stephen Fitzpatrick – into
the ranks of the big energy suppliers,
in a major shake-up of the industry.
The SSE deal would add 5.7 million
domestic customers to Ovo’s exist-
ing 1.5 million , putting Ovo in second
place after British Gas, which has
12 million. Ovo has off ered £250m for
SSE’s struggling household division,
called SSE Energy Services.
Ovo has grown into a medium-sized
fi rm after taking on half a million cus-
tomers from its smaller rivals Economy
Energy and Spark , which collapsed in
January, boosting its market share to
nearly 5%.
SSE’s chief executive, Alistair Phil-
lips-Davies , has been under pressure
to dispose of its retail division since the
group’s embarrassing failure to merge
it with its rival npower in December.
Both fi rms blamed the cap on energy
prices and growing competition fortheir failure to reach a deal. A sale
would leave SSE focused on its renew-
ables and networks businesses as a
generator and distributor of energy.
“SSE is actively progressing a num-
ber of options for the future of SSE
Energy Services, having determined
that its best future lies outside the
SSE Group,” SSE said in a statement
yesterday confi rming that it was indiscussions with Ovo Group over the
possible sale. It added that no fi nal
decisions had been made.
The consumer organisation Which?
expressed concerns. Caroline Nor-
mand , its director of advocacy, said:
“Mergers in essential markets, such
as energy, are rarely a good thing for
consumers, especially given the low
levels of competition.
“The competition authorities
must ensure there is thorough scru-
tiny before allowing any venture to
go ahead, to ensure it doesn’t reduce
competition and lead to higher bills.”Sarah Broomfi eld, an energy expert
at uSwitch, was more positive: “If this
deal does materialise, Ovo may well
bring a diff erent feel to what SSE cus-
tomers have traditionally been used
to, as one of the companies at the
forefront of new technologies such
as smart meters and electric vehicles. ”
SSE employs 20,000 people across
the UK and Ireland, including 9,000 at
the household supply division.
It reported a 38% drop in adjusted
profi t before tax to £736m for the year
to 31 March, and warned of another hit
to profi ts this year.▲ A sale of SSE’s household division
would leave the energy group free to
focus on renewables and networks
PHOTOGRAPH: ANDREW MILLIGAN/PADVD, CD and
video game
sales fall by
almost fi fth
Mark SweneySales of DVDs, CDs and video games
plunged by almost a fifth in the
three months to the end of June, as
consumers ditched physical products
for online streaming.
Specialist retailers including HMV
and Game joined the major super-
market chains Tesco, Asda and
Sainsbury’s in bearing the brunt of
the £50m year-on-year fall in quarterly
sales as Amazon increased its market
dominance.
Total sales of physical entertain-
ment products fell by 19% year on
year from £263.9m to £214m in the
second quarter, according to the mar-
ket research fi rm Kantar.
HMV, which has shut 27 stores this
year , suff ered the biggest fall in market
share, from 17.7% to 14.4%. Game’s
share fell from 8.1% to 7.6%.
The market share at Tesco, which
has just announced 4,500 job cuts , fell
from 10.3% to 8.3% year on year. Asda
and Sainsbury’s both recorded a fall in
their market share from 7.3% to 6.3%.
Morrison’s was the only major super-
market chain to post a share rise, albeit
of just 0.3% to 3.3%.
However, Amazon’s sales are boom-
ing. Amazon now accounts for £1 in
every £4 spent on physical entertain-
ment products by UK shoppers. In the
same quarter last year the US retailer
accounted for 22% of spend.
Its fellow online retailer eBay also
significantly increased its market
share, from 4% to 5.8% year on year.
“Amazon and eBay are increas-
ingly popular with shoppers wanting
to get the latest release without leaving
their homes, particularly if a tradi-
tional retailer has disappeared from
their local high street,” said Claire
McClelland, a consumer specialist at
Kantar.
In the video market, dominated
by DVDs, sales plunged 28% – about
£31m – from £111.5m to £80.7m.
Kantar said the tough comparison
with blockbuster sales of The Greatest
Showman DVD were to blame for £22m
of the fall.
“There’s a lot of competition out
there for DVD retailers, particularly in
the form of online streaming services,”
said McClelland. “No longer just for
young people, older generations are
becoming increasingly tech-savvy
and more confi dent at using these
platforms and they are buying DVDs
less often as a result.”
Sales of CDs fell 11% in the quarter
from £80m to £71m, partly due to a lack
of “big name” music releases exacer-
bated by the HMV store closures. Video
game sales fell 14% to £62m.Social housing
How a bank helped
tenants back to work
Page 32MPs tell companies to reveal
climate risk for investments
k
РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS