BusinessGreen rounds up all the key responses to the Treasury's Green Finance Strategy
The Treasury today unveiled its plan to ensure London is at the heart of global efforts to funnel the world's capital into climate-friendly activity.
The Green Finance Strategy, built off the back of the recommendations of the Green Finance Taskforce, sets out a number of measures the government hopes will mobilise the flow of cash to green projects and position London as a leading hub for the finance sector's low-carbon transition.
Measures include a promise to consider new rules - including mandatory regulations - for ensuring large companies and asset managers explain publicly how they would be affected by climate change. It also contains confirmation of the £5m Green Home Finance Fund, and news of a Green Finance Education Charter to embed sustainability issues in financial services qualifications.
BusinessGreen brings you all the expert reaction to the Strategy.
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, showing the rest of the world that responsible business can be a win-win for the economy and the environment."
John McDonnell MP, Labour's Shadow Chancellor, said:
"This is too little and too late from the government, with just £5m allocated to a Green Home Finance Fund. It's also totally ineffectual and toothless.
"While it's true that the finance sector will need to play a huge role in securing a sustainable economy for the future, it seems like the government is still stuck in the mindset of fiddling around the edges and hoping the free market will solve the climate emergency.
"We need to mobilise investment on a massive scale and that means Labour's proposals for a Sustainable Investment Board, network of regional development banks and £250bn National Transformation Fund."
Dr Ben Caldecott, a Member of the UK Green Finance Taskforce and the Director of the Oxford Sustainable Finance Programme at the University of Oxford, said:
"Aligning finance with sustainability is a necessary condition for delivering the Paris Agreement and the Sustainable Development Goals, as well as the UK's world-leading Climate Change Act and 25 Year Environment Plan. Not only do we need the environment to be properly integrated into financial decision-making, we also need policy frameworks that can deliver investment at the scale required to solve these great environmental challenges.
"As the UK Green Finance Strategy makes clear, the UK is in a unique position to green the global financial system. UK financial services, in particular the capital, expertise, and innovation in the City of London, are of systemic importance globally for defining and then ensuring the rapid adoption of sustainability-aligned financial services. Given this, green finance should be a core part of the UK's forthcoming UNFCCC COP26 Presidency in 2020.
"The Strategy is ambitious in scope, and rightly so. It clearly indicates that the UK will require the use of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations by 2022, a key requirement for listed companies to systematically measure and manage climate-related risks. It also puts down markers for exciting and potentially incredibly impactful future work, including on nature-related financial disclosures and accelerating the adoption of geospatial datasets required to green the financial system."
Stephanie Pfeifer, CEO at the Institutional Investors Group on Climate Change (IIGCC), said:
"The financial sector has a crucial role to play in addressing climate change. The Green Finance Strategy will support the City in capitalising on the opportunity to green the global economy. This brings with it financial innovation and wealth creation, just as it is essential in safeguarding the future of our planet.
"Climate change poses one of the greatest systemic economic threats we face today. Ensuring publicly listed companies and large asset owners disclose how climate change risk affects them is an important step forward in understanding and addressing the challenge.
"The Bank of England see $20tr of assets on the line globally without greater action being taken. Consistent and transparent reporting is key to ensuring the information is in place to act on exposure to a changing climate and avoid being caught on the wrong side of the transition to a cleaner economy."
Dr Nina Seega, research director at the Centre for Sustainable Finance at the University of Cambridge Institute for Sustainability Leadership (CISL), said:
"The new Green Finance Strategy opens the door for the UK to become a major sustainable finance hub, delivering expertise and innovation to the global economy. Aligning the regulatory framework to unlock green finance flows and increased capacity to deliver sustainable finance will be key to delivering the UK's commitment to net zero emissions by 2050.
"This strategy is a good indication the UK Government is serious about embedding climate and environmental factors in financial decision-making and accelerating green investment. If this leadership is delivered through a coordinated approach with regulatory authorities and the City, it has the potential to position the UK at the heart of the growing global green finance market."
Andrew Ninian, director of stewardship and corporate governance at the Investment Association, said:
"We support the continued development of the UK as a global hub for green investment, and recognise the important role that the investment management industry plays in building a more sustainable future by channelling finance from savers to companies and infrastructure projects.
"We welcome today's launch of the Green Finance Institute as well as steps to improve understanding and education in green finance through the Green Finance Education Charter. We look forward to working together with the government and regulators to forge a constructive path forward, helping to increase investment in sustainable projects and infrastructure as well as ensuring the UK is an international leader in decarbonisation."
David Symons, UK Director of Sustainability at WSP, said:
"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.
"For the City of London to become a zero carbon powerhouse, it will require project managers and technical experts to provide the confidence that a project is robust, as much as it is about finance. It is by harnessing this expertise that viable projects will gain finance and move beyond the drawing board."
Alex White, policy manager at the Aldersgate Group, 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.
"We welcome the recognition that private finance has a key role in tackling climate change and enhancing resilience, but the government must enable it to do so through the right policy framework. This Strategy must now be accompanied by an update on the Clean Growth Strategy based on the new net zero target, with binding regulations and market mechanisms to increase investment in zero carbon buildings, industry, transport and natural climate solutions."
Gudrun Cartwright, environment director at Business in the Community, 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. The financial system is in the perfect position to act as a catalyst to deliver the global sustainable economy we need to turn this existential threat into new models for prosperity and wellbeing. If the financial sector acts decisively, we could see a rapid knock-on effect within the businesses that depend on it. This is a momentous opportunity to design a future we are proud to pass on to future generations, rather than a risk that is too big to face.
"The plans outlined in the strategy for the Green Finance Institute, including funding to pilot new ideas such as green mortgages, increasing the responsibility for regulators and educators and government stepping up to play a leading role on the global stage will provide a solid springboard for UK PLC to become the innovators of the future and at the forefront of responsible business."
Kate Levick, E3G sustainable finance program leader, said:
"Setting a deadline and a pathway for mandatory climate risk reporting, together with measures aiming at greening public finance, are very welcome steps. But as a total package the Green Finance Strategy does not deliver the transformational step-change that the UK needs to finance action on climate change, and we call on the Treasury to increase its level of ambition."
Martin Baxter, chief policy advisor at IEMA, said:
"The challenge of tacking climate change and transitioning towards a truly sustainable future will require significant investment. It is vital that the financial system is orientated towards achieving net-zero carbon emissions and enhancing our natural assets - the publication of the Green Finance Strategy is a positive step in the right direction."
"Setting in law a net-zero 2050 target helps demonstrate the UK's global leadership in tackling climate change. The Green Finance Strategy and the development of sustainable finance standards will help to deliver the significant changes needed across the whole economy to deliver the climate change target and establish the UK as the global leader in sustainable finance."
Alasdair MacEwen, a spokesman for the Energy Efficiency Infrastructure Group, which represents over 30 cross-industry organisations, said:
"Unfortunately, the announcements are an inadequate response to the challenge at hand. There is overwhelming consensus around the economic and health benefits of energy efficient homes and that reducing home energy use is the crucial first, and least cost step in achieving net zero emissions.
"£1bn of additional investment is needed each year to make our homes energy efficient by 2035 and the announcements represent less than one per cent of that annual requirement.
"When the Green Finance Taskforce asked that government support financial incentives for energy efficient homes I'm sure they expected more ambition than this. If it's serious about meeting its targets, government is going to have to up its game and do so fast. Let's hope that the long-awaited energy efficiency action plan from government shows the way and fills the huge investment hole that exists."
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