The Conservatives outlined plans this week to establish the first green trading market and individual green ISAs as part of a move to make investments in environmentally sustainable businesses more attractive.
Shadow chancellor George Osborne proposed Green ISAs (GISA), which if implemented would offer a tax-free boost for savers investing in environmentally responsible companies.
Osborne also launched a working group, led by former Norwich Union chief executive Patrick Snowball, to develop a fully costed proposal on how GISAs would work by next year. The group will also explore scope for introducing a tax-free savings allowance as part of the scheme.
Dr Steve Waygood, head of engagement for the Norwich Union SRI team, said that introducing tax breaks on green ISAs would "behave like a quasi-subsidy for green businesses".
"If the measures were to ever come into force, then it should help reduce the cost of capital for green companies," he added.
Under the proposals a new green business standard will be drawn up and firms will have to meet its criteria to qualify for investment through GISAs. Osborne hopes that having to qualify to access GISA investment will act as a "major incentive for companies to curb their emissions and adopt greener technologies and practices", without the need for onerous government legislation.
Waygood highlighted the importance of getting the standard right because if the criteria are too narrow, underlying investments would be too volatile. Conversely, if they are too broad, GISAs could be labelled as "greenwash", undermining their credibility.
Separately, Osborne proposed "the creation of the world's first trading market for companies focused on green technology".
The Conservatives said that this new Green Environmental Market (GEM) would build on the success of the Alternative Investment Market (AIM), which has already attracted a large number of IPOs from emerging cleantech companies.
Osborne said the exchange would "provide new capital and opportunities for green technology companies… and will enable investors to track and invest in green stocks in a simple way".
A working group comprising the London Stock Exchange, the Climate Exchange and stakeholders from leading investors, businesses and the City is now set to develop "detailed implementable proposals" to support the idea, alongside qualifying criteria for companies looking to list on the GEM.
Pre-Budget Review delivers reforms to aviation tax and hints at more incentives for fuel-efficient cars 10 Oct 2007
Environmental Audit Committee report blasts Treasury for failing to act with sufficient "scale and urgency" to address climate change 05 Mar 2008
Sustainable Development Commission report insists credibility is at risk over civil servants' failure to meet a raft of environmental targets 18 Mar 2008
As Gordon Brown outlines plans for "at least" eight new nuclear power stations, MPs claim the government is not doing enough to curb its own carbon footprint 14 Jul 2008
Shadow housing minister outlines plans that would see moves to encourage staff to cut their carbon footprint count towards businesses' emission reduction targets 29 Sep 2008
Scientific body claims EU restrictions are failing to tackle rising ozone pollution levels, as weather systems carries gas in from other parts of the world 06 Oct 2008
After initial claims to the contrary, the Environment Agency has confirmed it is looking into firms suspected of illegally shipping electronic waste to scrap yards in Nigeria and Ghana 06 Oct 2008
Industry urges EU to make low interest loans available to help fund development of low carbon fleets 06 Oct 2008
More news
On a visit to GE's flagship turbine manufacturing facility in Germany, Andrew Donoghue hears how the engineering giant is betting big on wind energy 06 Oct 2008
In her excoriating account of the US financial crisis, Hazel Henderson argues that only the development of new, more sustainable business and accounting models can prevent a repeat of the current turmoil 02 Oct 2008
They may often be criticised for exaggerating green claims, but as Paul Thomas argues, PR departments can be a major force for positive environmental change 01 Oct 2008 More in-depth
Post your comment
Send an email to the Business Green editor at feedback@businessgreen.com
