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UK unveils Green Finance Strategy to drive progress towards net-zero goal

green finance

The UK Government has today (2 July) unveiled its highly anticipated Green Finance Strategy, outlining how the finance sector and better climate disclosure from corporates can drive progress towards wider action on climate change and the push towards net-zero emissions.

The strategy is set to place UK financial services at the centre of green finance efforts to tackle climate change and reduce emissions to net zero by 2050 – a target that was passed into UK law last month. The strategy features investment and funding increases into green projects, infrastructures and homes and is built on findings from the Task Force on Climate-related Financial Disclosures (TCFD), led by former New York Mayor Michael Bloomberg and Bank of England Governor Mark Carney.

More than 780 organisations now support of the TCFD, including the world’s largest banks, asset managers and pension funds, responsible for assets of $118trn, highlighting the appetite for green finance.

Energy and Clean Growth Minister, Chris Skidmore, said: “As the first major economy to legislate to reach net emissions by 2050, green finance can play a crucial role in our mission to protect the planet while growing the economy.

“Through today’s plans and by putting clean growth at the heart of our modern Industrial Strategy we’ll continue to work with our leading financial services sector to drive even more ambitious action through green finance , showing the rest of the world that responsible business can be a win-win for the economy and the environment.”

The strategy includes expectations for publicly listed companies and asset owners to disclose climate risk and impact data by 2022 and to work with regulators as to whether green finance becomes a mandatory requirement.

A £5m Green Home Finance Fund has also been established to help scale green finance mechanisms, including home energy efficiency grants, green mortgages – like the one championed by Barclays and energy efficiency retrofit projects – like the one championed by Moat Homes.

A Green Finance Education Charter will also be launched to place green finance and climate understandings as part of future qualifications and certificates for financial practitioners.

A total of £5.8bn has also been set aside for international climate finance to encourage other nations to act on climate collaboratively.

The green economy reaction

Responding to the launch of the strategy, City Minister, John Glen, said:

“The City has a vital role to play in securing a greener future for us all. By investing more in sustainable projects it can not only protect our environment, but also help establish London as the pre-eminent international centre for green finance.

“Today’s Green Finance Strategy will support this ambition, with new initiatives to boost funding for green ventures and ensure the environment is at the centre of all financial decision-making.”

WSP’s UK director of sustainability David Symons, said:

“A few days after Government has legislated on Net Zero, and a few weeks before the publication of the long-awaited Energy White Paper, today’s publication of the Green Finance Strategy is testament to the UK’s commitment to staying ahead of the curve when it comes to decarbonisation. The Green Finance Strategy is to be welcomed and bodes well for the Government’s ambitions to host COP26 here in the UK. 

“The UK’s financial sector has a great opportunity both to finance the carbon-free economy and also protect the nation’s pensions and savings from the fall out of dangerous climate change. The Green Finance Strategy is welcome, and is also just the start.  Reporting climate risks is an essential step in the right direction. Reporting alone is never enough. It is the tangible action that ensues, from better planning and engineering, to mitigation and adaptation measures across our built and natural environment that will make the real difference. 

The Aldersgate Group’ policy manager Alex White said:

“The UK’s first ever Green Finance Strategy is an important step in delivering the necessary investment for our 2050 net zero emissions target and the ambition of the 25 Year Environment Plan. There are several good announcements today.

“For example, the new £5m Green Home Finance Fund is a positive move for incentivising domestic energy efficiency investment, and the launch of the Green Finance Education Charter will be vital in ensuring the UK financial sector has the skills and expertise to lead the flourishing international green finance market.”

Business in the Community’s environment director Gudrun Cartwright said:

“With the UK now committed to a net zero carbon future, the publication of the Green Finance Strategy is an important next step. Recognising that climate change is an existential risk for all of us, including business, and putting the financial system at the heart of driving change are critical if we are to deliver a planet fit for our children’s future. This must now be put into practice at speed and scale.”

Original article here. Further information on renewables and how we can help in turning your organisation’s green and net-zero ambitions into ACTION here.

To discuss your own business energy challenges, including commercial electric vehicle charging, talk to us now on 01752 26 26 26 or email info@iuenergy.co.uk.

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