London must be at the heart of efforts to cut greenhouse gas emissions to net zero, the Government said as it launched a “green finance strategy”.
The strategy includes a £5 million green home finance fund to pilot products such as green mortgages to encourage people to upgrade the energy efficiency of their houses.
It aims to boost sustainable investment, with an expectation for listed companies to disclose how climate change impacts their work.
The Treasury is jointly funding a green finance institute with the City of London to create new opportunities for investors and boost the UK’s reputation as a “global hub for green finance”.
There will also be a green finance education charter to make sure financial qualifications develop people’s knowledge and understanding of the issue, and clarification of the need for regulators to have regard to climate change.
The Government also said it was playing a leading global role with £5.8 billion in climate finance, and ensuring the UK’s aid spending is in line with the international Paris Agreement on cutting emissions.
City Minister John Glen said: “The UK has a long history of leading the way in tackling climate change, but we need to do more to protect our planet for future generations.
“The City has a vital role to play in securing a greener future for us all.
“By investing more in sustainable projects it can not only protect our environment, but also help establish London as the pre-eminent international centre for green finance.
“Today’s green finance strategy will support this ambition, with new initiatives to boost funding for green ventures and ensure the environment is at the centre of all financial decision-making.”
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.”
Business group the CBI said green finance would play a vital role in ensuring the UK met its commitment – which became law last week – to cut emissions to net zero by 2050.
It called on the Government to bring together regulators, financial services firms and industry to develop regulations to promote green finance and create sector specific roadmaps to help sectors such as transport achieve net zero.
It also called for a fund from the British Business Bank to promote green finance for small and medium sized businesses and incentives to encourage industry to make the shift.
Rain Newton-Smith, CBI chief economist, said: “Business is right behind the need for the UK to have a net-zero economy by 2050 and build on our global leadership in cutting greenhouse gas emissions.
“Green finance is an excellent tool to help decarbonise the economy and could be another string to our bow as one of the world’s great financial powerhouses.”
Alex White, from the sustainable business and society leaders organisation the Aldersgate Group, said: “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.”
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