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BoE tweaks corporate bond scheme to spur climate action

·1-min read
FILE PHOTO: A person walks past the Bank of England, in London

LONDON (Reuters) -The Bank of England said on Friday it would introduce new rules for its 20 billion-pound ($26.9 billion) corporate bond-buying scheme this month which will favour companies doing more to reduce their impact on the climate.

The new eligibility criteria would tilt purchases "towards the stronger climate performers within their sectors," the BoE said in a statement.

The BoE launched the Corporate Bond Purchase Scheme in 2016 alongside its far bigger government bond purchase programme, a key part of its economic stimulus programme.

In March this year, the government tweaked the BoE's remit to include support for the net zero transition.

The BoE said the new rules would apply for its planned reinvestment of maturing corporate bonds later this month.

"Our approach will be consistent with targeting a 25% reduction in the carbon intensity of the CBPS portfolio by 2025, on the way to full alignment with net zero by 2050," it said.

($1 = 0.7445 pounds)

(Writing by William Schomberg, editing by Andy Bruce)

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