The UK Government’s Green Finance Strategy sets out a bold vision but the policy measures underlying this are insufficient to deliver systemic or transformational change. In particular, the Strategy does not set out the scale of the investment that the UK needs for resilient decarbonisation or propose a plan to raise this capital.
In the Green Finance Strategy, the UK government has demonstrated that it recognises the need for transformational change to finance UK resilience and decarbonisation. However, the measures it contains do not amount to a systemic shift.
The Strategy does not set out the scale of the investment that the UK needs for resilient decarbonisation or propose a plan to raise this capital. It fails to address potential UK influence on China’s Belt and Road strategy and allows continued financing of new fossil fuel projects through export credit finance.
The Treasury’s upcoming review of how to share the costs of implementing the UK net-zero target will be a crucial moment for increasing the UK’s ambition, as will the government’s proposed 2020 review of progress in greening the UK’s financial system, and UK’s bid to host that year’s climate negotiations.
Setting a deadline and a pathway for mandatory climate risk reporting, together with measures aiming at greening public finance, are very welcome steps. But as a total package the Green Finance Strategy does not deliver the transformational step-change that the UK needs to finance action on climate change, and we call on the Treasury to increase its level of ambition.
Notes to Editors
- E3G is an independent climate change think tank accelerating the transition to a climate safe world. E3G specialises in climate diplomacy, climate risk, energy policy and climate finance.
- In 2018, for the third year running, E3G was ranked the fifth most globally influential environmental think tank by the Global Go To Think Tank Index.
- E3G provided the Secretariat (jointly with PRI and the City of London) for the UK government’s Green Finance Taskforce which made recommendations in March 2018. The Green Finance Strategy responds in part to these recommendations.
- In March 2018 E3G provided written evidence to the Environmental Audit Committee’s Export Credit Enquiry. In June the Committee called on UK Export Finance to stop providing export credit to fossil fuel companies by 2021. The Green Finance Strategy commits UK Export Finance only to disclosing climate-related financial risk related to its investments.