The current cost of living crisis has highlighted the acute risks of the UK Government not proactively acting to deliver net zero. Without a managed approach to bring clean energy online across the UK, the British Energy Security Strategy cannot be delivered and further crises will follow.
Internationally, the UK has played a leading role in securing ambition on green financial reform, and credibly delivering the net zero strategy will further advance the UK’s diplomatic agenda. The UK led the way on green finance by committing to create the world’s first Net Zero Financial Centre and a Net Zero Financial System, and implementing several progressive green finance reforms.
However, the UK is yet to set out a comprehensive plan for how it will deliver finance for the net zero transition across the country. The 2022 Green Finance Strategy will be an opportunity for the Government to set out such a plan.
E3G’s response to the Call for Evidence on the Update to the Green Finance Strategy3 is based on the following core principles that are essential for the Green Finance Strategy to be a success:
- Represents a financing plan to get the UK on track to meet its climate targets for 2050 net zero and adaptation.
- Sets out how public investment and policy will be used to leverage in private finance, including aligning public budgets with net zero.
- Includes analysis and publication of financial flows to identify critical net zero investment gaps and investment opportunities and nominates an independent institution to carry out this function on an annual basis e.g., OBR, CCC.
- Sets science-based standards and requirements for financial regulation to incentivise alignment of financial flows with 1.5 degrees.
- Fully integrates Nature Positive and Cross-UK prosperity targets.
- Sets out clear objectives for UK global leadership and cooperation to secure international financing and financial reform to support climate safety for all.