A new report has hailed the United Kingdom as a fast-growing green finance hub, at the same time as the City of London announced a new Green Finance Initiative.
The two announcements were made last week at a major event co-hosted by the United Nations Environmental Programme (UNEP) and the City of London Corporation. The report, The UK: global hub, local dynamics – mapping the transition to a sustainable financial system, was published by the UNEP to correspond with the announcement of the new Green Finance Initiative, revealed by the City of London Corporation.
“2016 is set to be the year of green finance,” said Achim Steiner, UNEP Executive Director. “Across the world, we are seeing a growing number of countries aligning their financial systems with the sustainability imperative. I wholeheartedly welcome this new green finance initiative from the City of London, the first of what’s likely to be a very busy year.”
“The City of London Corporation is determined that 2016 be the year in which policymakers and practitioners convene to drive the long-term development of the UK’s green finance sector,” added Sir Roger Gifford, chair of the Green Finance Initiative. “As the UN Environment Programme put it so clearly, the financial system we need is one that fully supports and facilitates the transition toward a low-carbon economy, and we believe London can play a leading role in this process.”
The report specifically points to a number of firsts that have made the UK a leader in sustainable finance, and that have made environmental and social factors a core part of banking, capital markets, investments, and insurance in the UK. The UK is responsible for a number of firsts over the past 15 years, including being the first country to require pension funds to state whether they took social and environmental issues into accord. The UK’s Prudential Regulatory Authority undertook the world’s first review of the implications of climate change for the country’s insurance sector.
“London is not just a global financial centre, but also a hub for green and sustainable finance,” said Nick Robins, Co-director of the UNEP Inquiry and co-author of the report. “It is striking just how many key global initiatives are clustered in London – whether on responsible investment, green bonds, unburnable carbon, sustainable banking, climate disclosure or insurance risk.”
The report closes with a set of priorities it believes the UK should initiate under a UK Sustainable Finance Strategy:
- Establish a Green Bond hub to take forward the UK’s position as one of the top issuers of bonds focused on environmental solutions
- Empower individuals with the right information on the sustainability performance of their investments
- Rethink housing finance to reduce energy costs and environmental impacts
- Take a system-wide view on environmental risk, extending the Bank of England’s review of insurance to other sectors such as banking
- Explore the green potential of alternative finance, building on the UK’s leadership in areas such as peer to peer lending
While details are currently slim regarding the specifics of the newly launched Green Finance Initiative, it is known that the new body intends to “promote London’s status as a leading global centre for green financial and professional services, advocate for specific policy and regulatory developments, and provide leadership on issues relating to market impediments and opportunities.” Specifically, that means that in its first phase, the Initiative will focus on “boosting green bond issuance, developing accreditation, transparency and benchmarking standards, and informing and incentivising the market.”
Don't want to miss a cleantech story? Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.