Environment

Banks ‘being let off hook by weak climate regulation’

The Bank of England is facing criticism over the way it is conducting its first climate regulation tests, with politicians and campaigners warning that a lack of penalties for dirty assets will give banks little incentive to clean up their act.

While the regulator has been praised for committing to the exercise, the Bank of England has come under fire for so far refusing to publish data for individual firms, and stopping short of introducing immediate capital requirements, which would make it more expensive to offer loans and services to fossil fuel companies and high carbon projects.

Campaigners are concerned that one of the UK’s most lucrative industries is being given a free pass.

“Finance is one of the priorities of Cop26, but the UK’s credibility as hosts risks being undermined by the fact it has let its banks pour more than £200bn into fossil fuels since the Paris agreement was signed,” the Green MP Caroline Lucas said. “It needs to rectify these failures if it is to have any credibility during climate finance negotiations.”

The Bank of England is not the only regulator moving cautiously. So far, the European Central Bank and the Banque de France – which are among the few central banks to have conducted climate stress tests for their respective financial sectors to date – have only published aggregate data covering their finance industries, and have not introduced any restrictions, or deterrents, for banks serving polluting firms.

That is despite warnings from both regulators that banks will be severely affected unless they ramp up their response to the climate crisis.

Any deviation from the Paris agreement would result in higher loan losses for banks, according to the ratings agency Moody’s, rising anywhere from 3.5% in the “least disorderly” scenario, to 20% under the most extreme climate outcomes. It has raised concerns that the banking sector itself will suffer financially without swift action, which could had a ripple effect throughout the global economy.

Globally, reporting standards are low. A report by the Task Force on Climate-related Financial Disclosures (TFCD) published last year found that while bank reporting has improved since 2017, the sector continues to have the lowest percentage of disclosure for climate-related targets across all global industries, with 19% of firms meeting TFCD standards. By comparison, figures for the energy and transport sectors are 44% and 35% respectively.

Part of the challenge is that regulators are intent on gathering as much data as possible before introducing deterrents such as capital requirements, which determine the kind of financial cushion that banks must hold to protect them from risky loans and products on their balance sheets.

With such a complex exercise that looks at potential climate scenarios over the next 30 years, campaigners say the Bank of England may be setting an impossible task.

Its first climate tests – which it has not yet committed to repeat after this year – are far more complex than the regulator’s annual financial stress tests, which were introduced after the 2008 banking crash and measure banks’ resilience against economic shocks like a surge in unemployment, or a sudden collapse in house prices.

Instead, the climate tests will put banks through three scenarios with a 30-year time horizon, covering physical and transition risks, including one in which governments fail to take further steps to curb greenhouse gas emissions, resulting in average temperature increases of 3.3C, and a 3.9-metre rise in sea levels. The exercise will also look at how those scenarios could affect potential loan losses, as customers default on their loans due to slowing growth and economic uncertainty.

“If you’re looking for the perfect data set, you’re going to be disappointed because it’s never going to happen – there is always uncertainty” said James Vaccaro, who is an executive director of the Climate Safe Lending Network, which represents banks, academics and investors hoping to decarbonise the banking sector. “You’re always trying to extrapolate the past, but right now in terms of climate change, the past is not a good predictor at all of the likely future,” he said.

If that was not challenging enough, the Bank of England is also letting lenders determine how they measure their exposure to those climate risks individually, a move that it believes will foster innovation and unearth best practices that can be shared across the industry. However, that means it will take even longer for UK banks to produce comparable data that will help the public, governments and investors determine where they should apply the most pressure, or pull their business.

“At the moment the financial system is enabling and financing the forces that are driving climate change,” Lord Oates, the Liberal Democrats’ spokesperson for energy and climate change in the Lords, said. “And so the regulators have a duty to act now [and] in the absence of perfect information.”

International regulators have proved they are willing to consider capital requirements when new risks emerge. In June, the Basel Committee on Banking Supervision, which consists of regulators from the world’s leading financial centres, highlighted the potential risk around cryptocurrencies such as bitcoin, saying banks should be forced to put aside enough capital to cover 100% of potential losses.

Campaigners are calling for similar rules for climate risks. Last week, activists and academics including the historian Adam Tooze, signed an open letter to the Cop26 president, Alok Sharma, calling for the introduction of one-for one capital requirements, meaning that for every pound invested in fossil fuel projects, financial institutions such as banks and insurers would need to hold the equivalent to absorb future losses.

But not all central bankers are convinced that capital requirements on dirty assets will fully protect against financial shocks, since renewable energy and other innovative green assets could carry investment risks. There are also concerns that introducing capital requirements could cause market turmoil, since forcing a swathe of banks to raise money simultaneously could spook investors and make it more expensive for lenders to secure funds.

However, Vaccaro warned that near-term pain might be necessary to create a sustainable future for both the climate and financial system.

“We are potentially and unwittingly, perhaps even unconsciously, sacrificing long-term stability for short-term stability. In other words: don’t rock the apple cart now. But by not rocking it we basically totally hobble it from the perspective of actually getting it fit for the massive shocks that we’re expecting.”

The Bank of England said in a statement that “climate scenario exercises are new and complex across a number of dimensions”. A spokesperson said that it launched the exercise without having a perfect framework in place, since it may have taken years to do so otherwise.

“A key intention of the exercise was to build capabilities, and in some regards learn through doing. Consequently, we do not feel individual firm level disclosure at this juncture is appropriate.”

Environment

NiMet forecasts 3-day sunshine and cloudiness

The Nigerian Meteorological Agency (NiMet) has forecast a mix of sunny, cloudy, and thunderstorm conditions across the country from Sunday, May 18, through Tuesday, May 20.

In a weather outlook issued in Abuja, the agency detailed regional variations expected over the three days and advised residents to take precautions, especially against thunderstorms and strong winds.

For Sunday, NiMet projected predominantly sunny skies across much of the northern region, with cloudy intervals. However, thunderstorms are expected later in the day in parts of Gombe, Bauchi, Kaduna, Taraba, and Adamawa States. The North-central region will see sunny conditions, but isolated thunderstorms are anticipated in Kwara, Plateau, Nasarawa, Niger, Benue, and Kogi States during the afternoon and evening.

In the southern parts of the country, morning thunderstorms are predicted in states such as Cross River, Lagos, Ogun, Bayelsa, Rivers, Delta, and Akwa Ibom. More isolated thunderstorms are forecasted for later in the day.

On Monday, May 19, sunny skies with occasional cloud cover will persist in the northern region. Taraba and Adamawa States may experience morning thunderstorms, while isolated storms are likely in the afternoon or evening across Kaduna, Taraba, and Adamawa. The North-central states, including the Federal Capital Territory, Niger, Kwara, Benue, Nasarawa, Kogi, and Plateau, are also expected to experience isolated thunderstorms later in the day. Southern areas, including Ondo, Ogun, Lagos, Cross River, and Akwa Ibom, will likely have morning thunderstorms followed by more rain events in the afternoon or evening.

NiMet’s forecast for Tuesday continues the trend, with sunny conditions and few clouds in the north during the morning. Isolated thunderstorms are predicted in Taraba, Bauchi, Gombe, and Adamawa States, with additional storms expected later in the day in Borno, Yobe, Jigawa, Katsina, Kano, Kaduna, Adamawa, and Taraba.

In the North-central region, sunny skies with some cloud are predicted, while isolated thunderstorms may occur in the Federal Capital Territory, Nasarawa, Kogi, Plateau, Benue, and Niger States during the afternoon and evening. The southern region will likely see morning thunderstorms in Cross River, Lagos, Bayelsa, Rivers, and Akwa Ibom, with continued thunderstorm activity expected as the day progresses.

NiMet has advised residents to take safety precautions during thunderstorms, noting that strong winds may accompany the weather events. The public is urged to secure loose objects, avoid driving during heavy rainfall, disconnect electrical appliances, and stay away from tall trees. The agency also called on airline operators to consult with NiMet for up-to-date weather information to aid flight planning

Environment

NEMA cautions Lagos residents on safety amid downpour

The National Emergency Management Agency (NEMA) has cautioned Lagos residents on the need to observe safety rules to mitigate the impact of heavy rainfall in the state.

NEMA Coordinator, Lagos Territorial Office, Mr Ibrahim Farinloye, gave the advice in an interview with the News Agency of Nigeria (NAN) on Tuesday in Lagos.

Farinloye said motorists should park their vehicles and move away to safer environment during heavy rainfall.

He warned Lagos residents from taking shelter under temporary or makeshift accommodation during rainfall to avoid disaster.

He said people living on low level ground should move to a higher level ground for safety.

“Parents are enjoined not to send their children to errands during the rains.

“Follow instructions given by public safety officials.

“Be alert to changing weather conditions and be ready to move to higher ground.

“Consider postponing outdoor activities,” Farinloye said.

He advised parents to tie down or bring in outdoor objects (patio furniture, children’s toys, trash cans, etc.) that could be swept away or damaged during flooding.

“Consider unplugging sensitive electronic equipment before flooding occurs. But do not touch electrical equipment if you are wet or standing in water.

“Elevate items stored in your basement to prevent damage. If you have a sump pump, check that it is working,” Farinloye said.

He stressed that residents should consider clearing street catch basins to prevent or reduce street flooding.

He said motorists should void camping or parking along streams, rivers, creeks, or other areas prone to flooding during heavy rainfall.

“These areas can flood rapidly and with little warning,” Farinloye said.

NAN reports that most parts of Lagos has been experiencing downpour for about two consecutive days, leading to flash flooding and the destruction of the roofs of some buildings.

The Nigerian Meteorological Agency had issued warning that about 30 states, including Lagos were at high risk of severe flooding as the rainy season approaches, raising nationwide concern over the country’s level of preparedness. (NAN)

Environment

Time for climate action is now, not tomorrow- Tinubu to Global leaders

President Bola Ahmed Tinubu has urged world leaders to demonstrate unity, courage, and sustained commitment in addressing the worsening global climate crisis.

Speaking on Wednesday during a high-level virtual dialogue on climate and the just transition, President Tinubu reaffirmed Nigeria’s dedication to forging a paradigm shift in which climate action and economic growth advance together, not in opposition.

“The global climate emergency demands our collective, courageous, and sustained leadership. For Nigeria, the urgency of this moment is clear: we view climate action not as a cost to development, but as a strategic imperative.”

The meeting, co-hosted by United Nations Secretary-General António Guterres and Brazilian President Luiz Inacia Lula da Silva, aimed to accelerate global climate ambition ahead of COP30, which Brazil will host.

Leaders from 17 countries, including China, the European Union, climate-vulnerable states, and key regional blocs such as the African Union, ASEAN, and the Alliance of Small Island States, participated in the meeting.

The leaders sent a clear message: climate action is moving forward, full speed ahead.

Addressing the session from Abuja, President Tinubu outlined Nigeria’s Energy Transition Plan (ETP) as a bold, pragmatic roadmap for reaching net-zero emissions by 2060. The ETP targets five core sectors—power, cooking, transportation, oil and gas, and industry—and identifies a financing need of over $410 billion by 2060 to achieve these goals.

“We are, therefore, in the process of aligning our regulatory environment, fiscal incentives, and institutional frameworks to ensure that energy access, decarbonisation, and economic competitiveness proceed in lockstep. We are also taking leadership on Energy Access,” he said.

President Tinubu underscored Nigeria’s role as an anchor country in the Mission 300 initiative, implemented in partnership with the World Bank and the African Development Bank. The initiative aims to deliver electricity to 300 million Africans by 2030.

He recalled his participation in the Dar es Salaam Declaration earlier this year and Nigeria’s presentation of its National Energy Compact, which outlines reform commitments, investment opportunities, and measurable targets to expand clean energy access and clean cooking solutions.

“This compact is among the first of its kind in Africa and lays out our policy reform commitments and specific investment opportunities in the energy sector. It sets quantifiable targets to grow electricity access and increase clean cooking penetration.

“We are working to build capacity and ensure that we meet these targets, reflecting not just our ambition but also our commitment to deliver on that ambition measurably,” he said.

As part of the broader energy reforms architecture, President Tinubu announced the finalisation of the Nigeria Carbon Market Activation Policy in March 2025. This policy will unlock up to $2.5 billion by 2030 in high-integrity carbon credits and related investments.

He disclosed that Nigeria is actively updating its Nationally Determined Contributions (NDCs) in line with the UN Framework Convention on Climate Change (UNFCCC), with plans to present a comprehensive revision by September 2025.

“Our climate strategy is not limited to planning and regulation — it is also rooted in market reform.

“We are working to position Nigeria as a premier destination for climate-smart investment through the development of a Global Climate Change Investment Fund, which will serve as a platform to blend public and private capital, de-risk green infrastructure, and finance clean energy solutions at scale,” he said.

The fund will support key national priorities such as green industrial hubs, e-mobility infrastructure, regenerative agriculture, and renewable energy mini-grids for underserved communities.

President Tinubu thanked international partners, particularly the United Nations and Sustainable Energy for All (SEforALL), for their advisory and technical support.

“These partnerships are a shining example of the value of multilateral cooperation in climate delivery. We are prepared to collaborate, lead, and deliver — because we understand that the time for climate action is not tomorrow; it is now,” he said.