Green Finance Strategy - City Must Play Vital Role

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08 July 2019

Friday July 5 saw the Government launch the Green Finance Strategy, to increase investment in sustainable projects and infrastructure and with an expectation for listed companies to disclose how climate change has an impact on their work.

John Glen MP (Economic Secretary to the Treasury and City Minister) said the City of London must lead the way in securing a greener, more resilient and sustainable future for the UK.

Speaking at the third Green Finance Summit in London, the minister argued that the financial services sector will have a bigger role to play than any other sector in tackling climate change.

"As the world looks to shift to clean, resilient and sustainable economic growth, there is an opportunity to make London the go-to hub for green investment," Glen said.

Green Finance Strategy

The strategy sets out plans to increase investment in sustainable projects and infrastructure, make the UK a leader in decarbonisation and achieve the 2050 net zero carbon emissions target.

The strategy will also build on findings from the Task Force on Climate-related Financial Disclosures, led by former New York Mayor Michael Bloomberg and Bank of England Governor Mark Carney. This includes setting expectations for publicly listed companies and large asset owners to disclose by 2022 how climate change risk impacts their activities. Work with regulators will explore the most effective way of doing this, including whether mandatory disclosures are necessary.

Other announcements to support the growth of green finance include:

• Jointly funding the Green Finance Institute with the City of London to foster greater co-operation between the public and private sectors, create new opportunities for investors, and strengthen the UK’s reputation as a global hub for green finance.

• Establishing the £5 million Green Home Finance Fund to help pilot products such as green mortgages, which utilise green finance for home energy efficiency and incentivises energy efficiency retrofit to make homes more environmentally sustainable.

• Launching the Green Finance Education Charter to make sure financial services-related qualifications and certificates include developing practitioners’ knowledge and understanding of green finance, so they have the tools to take it up.

• Clarifying the need for financial regulators to have regard for climate change when advancing their objectives and discharging their functions – including the Prudential Regulatory Authority, Financial Conduct Authority and Financial Policy Committee.

• Playing a leading global role in Green Finance through £5.8 billion of climate finance; encouraging other countries to do more through forums such as the UN’s Climate Action Summit; working with the private sector on financial principles for phasing out coal generated electricity; and ensuring the UK’s aid spending is aligned with the objectives of the Paris Agreement.

At Friday's launch Glen also said: "The UK has a long history of leading the way in tackling climate change but we need to do more to protect our planet for future generations.

"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.

"The 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."

CEO of the Green Finance Institute, Dr Rhian-Mari Thomas OBE, said: "The Green Finance Institute, as the principal forum for collaboration between the public and private sector, is thoroughly committed to identifying and unlocking barriers to the mobilisation of capital towards impactful, real-economy outcomes.

"While the economy has grown by two-thirds in the last 30 years, carbon emissions have reduced by over 40 per cent, making the country the strongest performer in the G7. However, while 70 per cent of UK banks now consider climate change a financial risk, only 10 per cent are taking long term action to manage this."

Picture: The Government has launched the Green Finance Strategy.

Article written by Brian Shillibeer | Published 08 July 2019

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