The UK Government’s 2023 Green Finance Strategy – published as part of ‘Green Day’ announcement – set out the policy blueprint to become “the world’s first Net Zero-aligned Financial Centre.”
On Thursday 30 March the UK Government published a number of documents (50 in total so far, according to Carbon Brief) detailing its revised net zero strategy.
Alongside these documents was the 2023 Green Finance Strategy detailing the government’s plans to align the financial sector with a net zero future and promote green investment.
The areas of focus outlined in the document to create a Net Zero-aligned Financial Centre are:
- Transparency – ensuring stable and accurate communication between real economy, financial firms, financial services and end investors to inform stakeholders
- Transformation tools – the Government has pledged to support the development of tools and frameworks for members of the financial market to monitor their progress on sustainability and act upon the data provided
- Transformation channels – using its policy levers, the Government will: de-risk green investments whilst also lowering their cost of capital; broaden capital and investor base pools; enable investor-influence over corporate practise
The 2023 Green Finance Strategy also details how the Government aims to mobilise and create opportunities for green investment.
Below shows a table outlining some of the Government’s current commitments to unlocking green finance as set out in the document.
|During 2023||– Release a series of net zero investment road maps|
– Consult on specific actions required to mobilise additional finance using high-integrity markets
– Consult on the UK Green Taxonomy
|Q2 2023||– First meeting for the Net Zero Business and Investment Group|
|Q3 2023||– Launch a formal assessment mechanism upon the publication of the first two IFRS Sustainability Disclosure Standards (expected in June 2023)|
– Release further detail on the Sustainability Disclosure requirements (SDR) timeline to reflect the accelerated development of international standards
– Consult stakeholders on an update to the Environmental Reporting Guidelines
– Launch a call for evidence on scope 3 emissions reporting
– (Sept. 2023) Publish the first impact report of the Green Financing Programme
– Host Global Investment Summit 2023
|Q4 2023||– (Late 2023) Review Stewardship Guidance to provide clarity for trustees on their fiduciary duty |
– Begin consultations on the introduction of requirements for the UK’s largest companies to disclose their transition plan
|During 2024||– Set out adaptation finance deliverables alongside an action plan|
UK Export Finance (UKEF), the British Business Bank, UK Research and Innovation (UKRI) and the UK Infrastructure Bank (UKIB) have praised the 2023 Green Finance Strategy.
In a joint statement, UKEF and the Public Financial Institutions said: “Moving our economy towards net zero is both an environmental necessity and a huge economic opportunity. There is a real chance to drive business value, unlock growth, and scale technologies across all sectors, regions and nations of the United Kingdom.
“Each of our institutions plays a central role in helping to unlock investment to meet net zero. Alongside other government levers, we support cutting-edge research, unleash the full potential of start-ups and scale-ups, finance critical infrastructure projects, and realise the massive export opportunities of bringing UK-based solutions abroad.
“We will seek to increase the pace of investment in the transition and enable businesses and projects of all sizes across the UK to access the finance required to drive progress. We are establishing a joint UK Public Financial Institutions Green Finance and Sustainability Forum to drive forward our collaboration on this objective, building upon our respective roles and experience in mobilising investment across the UK.
“We are aligned with the priorities of the government’s Green Finance Strategy and commit to working with all our stakeholders to accelerate our economy’s journey towards decarbonisation and green growth.”