Alok Sharma: 'Finance and investment are the lifeblood of net zero projects'

Business Secretary Alok Sharma has emphasised the critical role of finance in delivering a green recovery from the coronavirus pandemic, as he announced a new £12m UK funding scheme to help advance low carbon economies in Asia, Africa, and South America.

In a speech at the London Stock Exchange yesterday, Sharma drew heavily on his previous 15-year career in corporate finance to make the case that "finance and investment are the lifeblood of net zero projects", telling his audience that "the UK is the place for you to invest in green assets".

As has been an increasingly prominent theme in the COP26 President's public speeches in recent months, Sharma again stressed the importance of the UK prioritising green investment as it seeks to recover from the looming recession sparked by the Covid-19 crisis.

"As we emerge from the public health pandemic, we not only want to support businesses to bounce back as quickly as possible, but also to do so in a way that meets the UK's big, structural challenges," Sharma said. "So this is why we want to deliver a green recovery. And we want to do that in partnership with business and finance."

The Business Secretary listed a raft of British green economy opportunities, including the offshore wind sector, carbon capture and storage clusters, home energy efficiency programmes, and wider green jobs growth, as he argued the Department for Business, Energy, and Industrial Strategy (BEIS) was "leading work to support a green recovery".

"And recovering from this pandemic makes these projects more necessary and more important than ever," he added. "And many of them require private finance to deliver. Which is why I am currently engaging with businesses across the country on the opportunities that arise from our net zero commitment and how they can support a green recovery."

Earlier this week, Sharma chaired a series of roundtables bringing together business, trade bodies, regulators, and academics to discuss potential measures that could support the economic recovery, including one roundtable meeting specifically looking at how to deliver a green recovery that accelerates the UK's transition to net zero emissions.

The talks come as the government draws up its hotly-anticipated coronavirus recovery economic stimulus strategy, which is expected to be unveiled next month.

Elsewhere in his speech, Sharma urged the financial sector to take greater account of the risks posed to their business and investments by climate change and the net zero transition, calling on firms to sign up to the guidelines set out by the Taskforce on Climate-related Financial Disclosures (TCFDs).

He said the risks of investing in a net zero future were clear "but actually the opportunities are clearer yet".

And, touching on his role as President of the UN climate summit due to take place in Glasgow in November 2021, Sharma said his aim was "to ramp up ambition towards a climate-resilient, zero-carbon economy".

He also announced that from August the government would launch the first round of its UK PACT Green Recovery Challenge Fund, which would see £12m awarded to green economy projects in Africa, Asia, and South America.

The new Fund, which forms part of the government's £60m Partnering for Accelerated Climate Transitions (PACT) initiative, is seeking innovative ideas to step up decarbonisation efforts in the wake of the Covid-19 outbreak, with up to £500,000 available to individual projects.

"This will major on green finance and ways that companies can increase transparency and the disclosure of financial risks," Sharma said. "The UK government will fund the best projects and approaches to be deployed globally, and share UK expertise to support others with their own green recovery."

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