UK’s Green Finance Strategy

The Government has published its Green Finance Strategy for the financial sector with the objectives of aligning private sector financial flows with clean, environmentally sustainable and resilient growth, supported by government action, and the strengthening of the competitiveness of the UK financial sector.

The Strategy should ensure that financial risks, and opportunities, from climate and environmental factors, are integrated into financial decision making and aid the acceleration of finance to support the delivery of the UK’s carbon targets and clean growth, resilience and environmental ambitions.

Ensuring UK financial services capture the domestic and international commercial opportunities arising from the ‘greening of finance is also included, such as climate-related data and analytics, and from ‘financing green’, such as new green financial products and services.

Commenting on the launch Ben Nelmes, head of public policy at the UK Sustainable Investment and Finance Association, said: “Investors have a vital role to play in the low-carbon transition, whether financing the new clean energy, transport, heating and industry or managing the financial risks of climate change for savers. The Government’s Green Finance Strategy is a good first step in setting out how the UK will play to its strengths as a global financial centre in leading a global response to climate change.”

The Strategy will also consider a mandatory requirement for listed companies and pension funds to disclose climate-related risks from 2022, a major change of opinion as previously there has been resistance to enforce reporting, although for the present reporting will remain voluntary.

“We were the first country in the world to set long-term, legally binding emissions reduction targets, through the Climate Change Act 2008. We have led the G20 in decarbonising our economy,” commented Philip Hammond and Greg Clark in an introduction to the strategy. “Meeting our objectives will require unprecedented levels of investment in green and low carbon technologies, services and infrastructure. Green finance will be central to providing the flows of capital we need.”

Full report here.

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