LONDON, (Reuters) – The rise in coal demand following Russia’s invasion of Ukraine will be a setback in reaching a net zero economy by 2050. However, it will help boost investment in renewable energy.

Elisabeth Stheeman, a member of the BoE’s Financial Policy Committee (FPC), said the impact on the transition to net zero of the increase in energy prices, as a result of Russia’s invasion of Ukraine, was yet to be determined.

Stheeman stated in a speech that recent events had highlighted the risks businesses face during transition.

She said, “In view of this situation the role of central banks and supervisors to continue to build resilience to climate related financial risks and can also support the transition,”

A “climate scenario” study was conducted by the Bank to evaluate the resilience of the banks and insurers to various climate-related risks.

On May 24, aggregate results will be released.

Stheeman stated that the exercise was not meant to assist in setting capital requirements.

She added that the FPC would also make use of it to assess risk management abilities in the financial industry and determine how banks or insurers might adapt their business models to different climates.