Global Matters Weekly – 22 March 2021

Bailey, Powell and Lagarde; the new eco-warriors?

by Robert White, CFA

For all the column inches dedicated to central bank meetings this month, one potentially seismic change to monetary policy has slipped under the radar over the last few weeks. In the most recent UK budget, chancellor Rishi Sunak announced that the Bank of England should reflect the “importance of environmental sustainability”1 in policy decisions, which includes asset purchases. The prospect of central banks determining which assets to support based on environmental credentials points to a significant increase in the importance of environmental, social and governance (ESG) factors for investors, and also raises questions about the appropriate role of central banks going forward.

Market Snapshot

  • Global equities fell -0.4% last week
  • Government bond yields continued to rise around the world
  • Brent crude fell -6.8% to $64.5 a barrel as demand flags in key markets
  • Gold rose by 1% to 1745.2 per ounce.