UK Launches Green FInance Strategy

The City of London must lead the way in securing a greener, more resilient and sustainable future for the UK, City Minister John Glen said as he launched the government’s Green Finance Strategy (GFS) July 2. He argued that financial services will have a bigger role to play than any other sector in tackling climate change.

This includes setting expectations for publicly listed companies and large asset owners to disclose by 2022 how climate change risk impacts their activities. Work with regulators will explore the most effective way of doing this, including whether mandatory disclosures are necessary. 

Other announcements to support the growth of green finance include: the £5mn ($6.3mn) Green Home Finance Fund to help pilot products like green mortgages; the Green Finance Education Charter to make sure financial services-related qualifications and certificates include developing practitioners’ knowledge and understanding of green finance; and clarifying the need for financial regulators to have regard for climate change when advancing their objectives and discharging their functions – including the Prudential Regulatory Authority, Financial Conduct Authority and Financial Policy Committee.

The UK is also intended to play a leading global role in Green Finance through £5.8bn of climate finance, encouraging other countries to do more through forums like the UN’s Climate Action Summit; working with the private sector on financial principles for phasing out coal generated electricity; and ensuring the UK’s aid spending is aligned with the objectives of the Paris Agreement.

The Green Finance Institute, where the GFS was launched, says it is the principal forum for collaboration between the public and private sector and as such it is “thoroughly committed to identifying and unlocking barriers to the mobilisation of capital towards impactful, real-economy outcomes.”