The Government’s green finance advisers have put forward a ten-point list of investment guidelines which they believe would accelerate the UK’s global low-carbon leadership credentials.
The Green Finance Taskforce’s report claims that “unprecedented levels of investment” will be required for the UK “to lead the world in cutting emissions while driving growth”.
Among its recommendations, the group calls for a relaunch of the UK’s green finance activities through a new unified brand, and the integration of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations through the UK’s corporate governance and reporting framework.
It also urges the Government to boost investment in innovative clean technologies, clarify investor roles and responsibilities and drive supply and demand for green lending products. Specific measures proposed are new Green Buildings Passports for residential and commercial properties and a Green Investment Accelerator for early-stage technology grant funding.
A sovereign green bond similar to the one issued by the UK’s French counterparts – which was €9.7bn – should be considered as one of the measures of a UK green capital raising plan, the Taskforce claims.
The Taskforce said it plans now to “work closely with the Government and other players to support consideration and implementation of these recommendations and secure the benefits of clean growth”.
Launched last September, the Green Finance Taskforce includes top financial experts from Aviva, Barclays, HSBC, Legal & General, and the Bank of England, who work alongside academics and sustainability experts to accelerate private sector funding in green technologies, infrastructure and innovative start-ups.
Nick Molho, chief executive of the Aldersgate Group, which sits on the Task Force, welcomed the recommendations: “The Green Finance Taskforce recommends a comprehensive set of measures which, if implemented together, will make the investment in green infrastructure projects more attractive.
“The recommendations for Government to develop a national capital raising plan, increase financial incentives for investment in green projects, require investors to consider environmental risks and make it compulsory for businesses to disclose how they are coping with climate change risks are all critical to moving the needle on green finance.”
But Molho said, to be fully effective, implementation of the recommendations must be accompanied by more policy detail under the Clean Growth Strategy and 25 Year Environment Plan.
“If we want financial institutions to ‘green’ their investments, there needs to be a pipeline of green infrastructure projects for them to invest in,” he added.
“This will only happen if Government provides more clarity in the coming months on the regulations and incentives that will be introduced to encourage investment in the energy efficiency of buildings, on- and offshore wind, low carbon heat, electric vehicles and the natural environment.”
Earlier this month London was ranked as the best financial hub in the world for green financing offerings, with a report predicting that the market for green offers will grow “substantially in size and quality”.