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No investment pipeline without policy detail

16th May 2018

Endorsing the House of Commons Environmental Audit Committee (EAC)’s report on green finance today, the Aldersgate Group stressed that government must provide additional detail on delivering the ambition of the Clean Growth Strategy and the 25 Year Environment Plan to provide a project pipeline for investment. 

Alex White, Senior Policy Officer at the Aldersgate Group said: “There are willing investors in the green economy, but not enough projects to invest in. Boosting the pipeline of green infrastructure projects will be critical to meet the UK’s environmental goals and should be the first priority in growing green finance. Policy detail is key: as the report notes, policy changes in the last Parliament, such as the cancellation of the Zero Carbon Homes policy, has contributed drop off in bankable projects. Government must now restore investor confidence and rebuild the base of investible propositions through clear and stable policies. In particular, we look to government to set out detailed policy mechanisms for boosting private sector investment in low carbon heat, transport and natural capital. [1]  

Alex White added: “We urge the government to respond promptly to the Green Finance Taskforce recommendations and ensure green finance delivers meaningful benefits to the UK’s real economy. For example, the development of a green mortgage market must be underpinned by net zero carbon standards in new buildings and fiscal incentives to retrofit existing buildings to become more energy efficient.”  

[1] The Aldersgate Group recently published a report on green infrastructure investment, Towards the new normal: increasing investment in the UK’s green infrastructure which considers how greater policy detail in the Clean Growth Strategy and 25 Year Environment Plan can deliver cost-effective pipelines of green infrastructure projects. It also suggests changes to financial regulations to encourage long-term investment in green infrastructure, targeted public spending to crowd in private sector investment in complex projects, the issuance of a sovereign green bond to help plug the likely drop in funding from the European Investment Bank after Brexit and it greater mandatory business disclosure of climate and environmental risks to better inform investment decisions. 


Ambitious and well-enforced environmental regulations are good for business

10th May 2018

Reacting to the publication of the government’s consultation on a new Environmental Principles and Governance Bill, Nick Molho, Executive Director of the Aldersgate Group said: “Well-designed, ambitious and properly enforced environmental regulations are essential to economic growth: they provide a stable environment for businesses to invest in, support innovation in new green solutions and products and provide a level playing field across the economy [1]. This consultation to introduce a new Bill to set out environmental principles and a new governance body with statutory underpinning is therefore a significant and positive step forward and has the potential to support improved enforcement of existing legislation and good quality policy making on the environment after the UK has left the EU.”    
Nick Molho added: “To maximise regulatory certainty and clarity of policy direction for business, the new Bill should set out environmental principles in legislation, be broadened to include specific environmental improvement goals linked to the delivery of the government’s 25 Year Environment Plan and should provide the new body with powers to advise government on the delivery of these goals. Environmental gains and business certainty would also be clearly enhanced if devolved administrations played a role in co-designing and owning the new environmental principles and governance body.”

[1] BuroHappold (December 2017) Help or Hindrance? Environmental regulations and competitiveness. This report explores the impacts of ambitious environmental standards on business competitiveness, skills and innovation to conclude that well-designed environmental regulations can deliver positive economic outcomes in the form of increased business investment in innovation and skills, better quality products and infrastructure, greater business competitiveness and job creation.