The UK has taken strides with its development towards the global Green Finance initiative, thanks to £10m in new funding, as announced by Energy Minister Anne-Marie Trevelyan on 15th February 2021.
The new UK Centre for Greening Finance and Investment will begin in April 2021, with physical roots in London and Leeds opening soon after, supported by partnerships with a number of UK institutions including the University of Oxford, the University of Leeds, and Imperial College London.
What is Green Finance?
Ultimately, Green Finance is any structured financial activity created to ensure a better environmental outcome. At its simplest – Green Finance is a way to increase the level of financial flows (from banking to micro-credit to insurance and investments) from the public, private, and not-for-profit sectors to ensure sustainable development priorities are kept front of mind. A crucial part of this is to better manage environmental and social risks, and take up opportunities that bring both a decent rate of return and environmental benefit and deliver greater accountability.
The UN’s Influence
The United Nations Environment Programme has been working with countries, financial regulators, and the finance sector to align financial systems to the 2030 sustainable development agenda, ensuring direct financial flows to support the delivery of the Sustainable Development goals.
Government’s Ten Point Plan for a Green Industrial Revolution
One of the key ten points from the Governments Ten Point Plan for a Green Industrial Revolution, released in November 2020, was the unleashing of innovation and development of new finance sources to support green technology development for net-zero. The ambitions previously laid out in the Prime Minister’s Ten Point Plan are directly supported by the newly allocated funding and act as the UK’s latest development in the drive to build back greener.
To read more about the Government’s Ten Point Plan for a Green Industrial Revolution, and how else they are planning on creating 250,000 new green jobs, have a look at our previous insight on ‘What is the Green Industrial Revolution?’
Government’s Green Finance Strategy
Launched in July 2019, the Government’s Business, Energy, and Industrial Green Finance Strategy supports the UK’s economic policy for strong, sustainable, and balanced growth. Informed by the private sector and wider stakeholders, the strategy is an ambitious package, which brings work together from across the government, regulators, and the private sector, focussing on three core elements:
- Greening finance: ensuring current and future financial risks and opportunities from climate and environmental factors are integrated into mainstream financial decision making, and that markets for green financial products are robust in nature.
- Financing green: accelerating finance to support the delivery of the UK’s carbon targets and clean growth, resilience, and environmental ambitions, as well as international objectives.
- Capturing the opportunity: ensuring UK financial services capture the domestic and international commercial opportunities arising from the ‘greening of finance’, such as climate-related data and analytics, and from ‘financing green’, such as new green financial products and services.
The new funding announced on 15th February 2021, will directly feed into the goals outlined in the strategy, with the new Green Finance Centres looking to support this strategy directly.
What will these centres do?
The two new hubs, due to open soon, using London and Leeds as physical touch-points, will provide world-class data and analytics to financial institutions and services, such as banks, lenders, investors, and insurers around the world to better support their investment and business decisions by considering the impact on the environment and climate change.
For example; the new centre will equip banks with the latest environmental and scientific intelligence to help companies of all sizes, including start-ups, anticipate, adapt and gear up for the risks posed by climate change
The pioneering research due to be undertaken at these centres will also help create new world-leading products and services to help tackle climate change, such as;
- Cutting edge technologies that measure severe storms and flood risks
- Tools that can improve data on industrial pollution
This is due to unlock brand-new opportunities for Britain to take an international lead in greening global finance, as well as positioning both Leeds and London as global centres for Green Finance. The new developments in Green finance are also a step towards securing Britain’s economy by drawing in international talent and creating thousands of new green jobs.
When announcing the new steps in Green Finance, earlier this month Energy and Clean Growth Minister, Anne-Marie Trevelyan was quoted saying; “The UK Centre for Greening Finance and Investment in London and Leeds will encourage financial services to turn the tide of their investments and focus on sectors and companies that have a smaller environmental footprint. Doing so will support industries and businesses to develop clean green innovations, creating thousands of jobs across the country – ensuring we build back greener.”
How can Animo help?
With our roots in the capital of London, we at Animo know just how integral this booming hub can be to international development. For any further queries about how the above-mentioned may affect your business, get in touch with us today, where one of our expert consultants will be happy to advise on best practices for your business. Call us on +44 (0)207 060 0835, email us at info@animoassociates.com or fill out a contact form below.
