Increasing green investment to meet our carbon budgets presents huge opportunities for the UK, but it isn’t happening at the scale or speed required - up to £693bn investment in low carbon infrastructure will be needed by 2031 in the UK.
The challenge for green finance is not a lack of capital but a lack of bankable projects. We need a policy framework that makes investment in green infrastructure attractive, to boost private spending and growth, create jobs and deliver the Industrial Strategy, Clean Growth Strategy and 25 Year Environment Plan.
The Aldersgate Group argues that the UK government must establish a robust investment pipeline through long-term visibility and transparency on policy direction. Government and regulators must ensure that the full impact of investments is reflected in reporting and regulation, so future climate-related risks are reflected in businesses’ bottom lines, allowing markets to move money to forward-looking and lower-risk businesses. Policy makers need to improve the profitability of sustainable businesses relative to unsustainable ones.