The Aldersgate Group is part of a group of twenty organisations which wrote a letter to the Chancellor of the Exchequer last week to make recommendations for the design and mission of the new UK National Infrastructure Bank, as announced in the 2020 Spending Review. As the UK faces the triple crises of climate, biodiversity and COVID-19, the Aldersgate Group believes that a core focus of the Bank should be to play a vital role in setting long-term committed public funding and unlocking further private finance. This approach can drive the Prime Minister’s desire for a green industrial revolution across the country and help the UK bounce back from the COVID-19 crisis.
The Bank should be established as a mission-driven institution with a legal mandate to achieve the levelling up agenda, the UK’s net zero emissions target and its ambition to reverse the decline of the natural environment within a generation. The Bank’s primary objective should be to genuinely address market failures and act as a de-risking vehicle to ‘crowd in’ private capital towards the technologies, skills and institutions that will be needed to build a thriving net zero emissions economy. These should include the emerging technologies needed to decarbonise complex parts of the economy, such as hydrogen and carbon capture, use and storage, but also natural capital and nature-based solutions.
Alongside twenty other signatories, the Aldersgate Group believes that the National Infrastructure Bank should be fully independent, led by an experienced public banker and a board which reflects the sectors with which the bank will interact. It should also have sufficient funding to carry out its mission and functions. Finally, signatories call on the Bank to have the power to access capital markets for both debt and equity, and to create opportunities for citizens to participate and invest in the UK’s transition to a net zero emissions economy.
The letter to the Chancellor was supported by a detailed policy briefing accessible here.
Reacting to the Government's announcement on ending fossil fuel support overseas through UK export finance, aid funding and trade promotion, Nick Molho, Executive Director at the Aldersgate Group, said: “We warmly welcome the Prime Minister’s commitment ahead of the Climate Ambition Summit to end support for fossil fuel sectors overseas and shift to financing low carbon energy projects. In doing so, the UK has sent a clear signal to the wider investment market about the importance of aligning financial flows with climate objectives and has put in place the right conditions to have the world’s greenest export credit agency ahead of its COP26 presidency. In order to prevent major stranded asset projects, we urge the government to implement this change as soon as possible, with all future projects in line with the goals of the Paris Agreement. Government should build on today’s announcement by ensuring that environmental and climate objectives are placed at the centre of our future trade policy, with robust scrutiny measures inserted into the Trade Bill currently passing through Parliament." 
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 The Aldersgate Group's trade briefing, Aligning the UK’s trade policy with its climate and environmental goals, calls on the UK government to ensure its upcoming trade agreements are supportive of the UK’s environmental and climate ambitions. The report can be found here: https://www.aldersgategroup.org.uk/latest/page:2#uk-trade-policy-must-be-aligned-with-environmental-and-climate-goals
Reacting to the Chancellor of the Exchequer's announcement today on the UK's roadmap to mandatory climate-related disclosures, Nick Molho, Executive Director at the Aldersgate Group, said: "The Government’s intention to legislate for companies to disclose their exposure to climate risks in line with the TCFD recommendations  is an essential step in improving the quality, comparability and transparency of climate-related disclosures across the economy and one which the Aldersgate Group has long called for . To ensure that this new reporting regime results in better decision making, it will be important that companies be required to report how they are managing the climate risks they have identified."
Nick Molho added: "Government policy can support businesses in adapting to TCFD aligned reporting by providing supportive guidance, setting up a corporate reporting lab to test different reporting approaches, and looking at how existing disclosure requirements can best be integrated within the TCFD reporting framework to avoid duplication of effort."
Nick Molho added: "Today’s announcement of the UK’s first Sovereign Green Bond in 2021 is a welcome step in financing projects which deliver on the UK’s climate and environmental ambitions. There is still further work to do in delivering the Government’s objective of greening the financial system and growing the flows of green finance. Developing green finance standards, setting up a National Investment Bank and reviewing prudential requirements to make it easier to invest in low carbon infrastructure are all essential measures that will help unlock the private finance needed to deliver the UK’s net zero emissions target and other environmental goals." 
 The Financial Stability Board set up the Taskforce on Climate-related Financial Disclosures (TCFDs), which published key recommendations to improve and increase the disclosure of climate-related financial information: https://www.fsb-tcfd.org/
 In October 2019, the Aldersgate Group published a policy briefing calling for TCFD aligned reporting to be made mandatory and setting out a range of recommendations to implement such a requirement in practice: https://www.aldersgategroup.org.uk/latest/page:2#mandatory-climate-risk-disclosure-essential-to-get-to-net-zero
 On 5th October, the Aldersgate Group launched a new report, Building a Net Zero Emissions Economy, which sets out key policy measures which need to be taken in this parliamentary term to put the UK economy on track for net zero emissions. The report is available at: https://www.aldersgategroup.org.uk/latest#businesses-call-for-urgent-policy-decisions-to-put-uk-economy-on-track-for-net-zero-emissions
Welcoming the launch of the Green Finance Strategy today, Alex White, Policy Manager at the Aldersgate Group, said: “The UK’s first ever Green Finance Strategy is an important step in delivering the necessary investment for our 2050 net zero emissions target and the ambition of the 25 Year Environment Plan. There are several good announcements today. For example, the new £5m Green Home Finance Fund is a positive move for incentivising domestic energy efficiency investment, and the launch of the Green Finance Education Charter will be vital in ensuring the UK financial sector has the skills and expertise to lead the flourishing international green finance market.”
“We welcome the recognition that private finance has a key role in tackling climate change and enhancing resilience, but the government must enable it to do so through the right policy framework. This Strategy must now be accompanied by an update on the Clean Growth Strategy based on the new net zero target, with binding regulations and market mechanisms to increase investment in zero carbon buildings, industry, transport and natural climate solutions.”
Alex White added: “Widespread and consistent adoption of the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations is necessary to create a level playing field, ensure comparability and future-proof businesses and investors against the financial impacts of climate change. We urge government to send a clearer signal that TCFDs will become mandatory by 2022 if voluntary take-up remains insufficient.”
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 The Aldersgate Group published a report on green infrastructure investment in March 2018, Towards the new normal: increasing investment in the UK’s green infrastructure which considers changes to financial regulations to encourage long-term investment in green infrastructure and greater mandatory business disclosure of climate and environmental risks to better inform investment decisions, alongside recommendations on targeted public spending to crowd in private sector investment in complex projects and greater policy detail to deliver a cost-effective pipeline of green infrastructure projects.
 The Aldersgate Group was also part of the government’s Green Finance Taskforce which released its recommendations in March 2018. http://greenfinanceinitiative.org/workstreams/green-finance-taskforce/
Alex White, Policy Manager at the Aldersgate Group, welcomed government’s announcements on green finance today, saying: “It's positive to see that the government is driving forwards the green finance agenda. In particular, we're encouraged that government is supporting work on the development of green finance standards and that it is considering how the growth of green finance can have real impacts on infrastructure funding. Today’s announcement on quantifying the UK’s pipeline of green infrastructure will help to demonstrate the size of the investment opportunity to the private sector, as well as the gap in planned UK infrastructure we still need to build to remain within 1.5 degrees of global warming.”
Alex White added, “Once we’ve established just how green the infrastructure pipeline is, government must provide more clarity in the coming months on the regulations and incentives that will be introduced to encourage even more green projects to fill that infrastructure gap and meet our carbon budgets, such as investment in the energy efficiency of buildings, low carbon heat, electric vehicles and the natural environment. The new Clean Growth venture capital fund announced today will be a useful tool to support investment in these less mature and complex areas. We're also pleased to see the planned engagement at regional level, to really deliver the gains from green finance across the country.”
Responding to the House of Commons Environmental Audit Committee (EAC)’s report today on embedding sustainability in financial decision making, Alex White, Senior Policy Officer at the Aldersgate Group said: “Financial markets are overwhelmingly geared towards maximising short-term returns, to the potential detriment of long-term value creation.  However, climate-related risks and pensions are both long term in nature. It is not sound financial management if up to £2tn of UK pension savers’ money  is being invested without a strategy to avoid the longer-term risks that could reduce the value of their savings. We therefore endorse the EAC’s recommendation to clarify that pension fund trustees must consider Environmental, Social and Governance risks as part of their fiduciary duty.”
Alex White added: “Better information on long-term risks and risk management strategies is needed to underpin a more forward-looking financial system. The current lack of sufficient, quality data about the financial impacts of climate-related risks and opportunities makes it difficult to accurately calculate investment risk and allocate capital efficiently, even with clearer guidance on fiduciary duties.
Widespread implementation of the TCFD framework will help businesses, investors and investment intermediaries to develop long-term climate risk management strategies. To ensure comparability between sectors this should be mandatory in the medium term, with a transitional arrangement from current mandatory carbon reporting to minimise burden for reporting entities. Businesses will require greater guidance and technical assistance from government, similar to the European Commission’s proposed Corporate Reporting Lab , to help identify best practice and allow for initial trial and error.”
 The Aldersgate Group published a report on green infrastructure investment in March 2018, Towards the new normal: increasing investment in the UK’s green infrastructure which considers changes to financial regulations to encourage long-term investment in green infrastructure and greater mandatory business disclosure of climate and environmental risks to better inform investment decisions, alongside recommendations on targeted public spending to crowd in private sector investment in complex projects and greater policy detail to deliver a cost-effective pipelines of green infrastructure projects.
 Converted from USD$2,868bn in 2016. Source: Willis Towers Watson (January 2017) Global Pension Assets Study 2017
 European Commission (8 March 2018) Action Plan: Financing Sustainable Growth COM/2018/097
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. 
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.”
 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.
The Aldersgate Group, which sits on the Green Finance Taskforce (GFT), urges the government to rapidly implement the GFT’s recommendations published today. However, based on the findings of its recent report , the Group warns that these recommendations will only be fully effective if the government also provides the policy detail that is needed under the Clean Growth Strategy and 25 Year Environment Plan to create a pipeline of green infrastructure projects which can be invested in.
Nick Molho, Executive Director at the Aldersgate Group said: “Today, the Green Finance Taskforce recommends a comprehensive set of measures which, if implemented together, will make investment in green infrastructure projects more attractive. The recommendations for government to develop a National Capital Raising Plan, increase fiscal incentives for investment in green projects, require investors to consider environmental risks and make it compulsory for businesses to disclose how they are coping with climate change risks are all critical to moving the needle on green finance. The Taskforce has suggested a wide range of actions beyond the top recommendations, which the government should consider in full.
However, to be fully effective, implementation of these recommendations must be accompanied by more policy detail under the Clean Growth Strategy and 25 Year Environment Plan. If we want financial institutions to ‘green’ their investments, there needs to be a pipeline of green infrastructure projects for them to invest in. This will only happen if government provides more clarity in the coming months on the regulations and incentives that will be introduced to encourage investment in the energy efficiency of buildings, on- and offshore wind, low carbon heat, electric vehicles and the natural environment.”
 Aldersgate Group, Towards the new normal: Increasing investment in the UK's green infrastructure, March 2018. Following a one-year project with businesses and investors, this report identifies the key barriers to greater investment in green infrastructure in the UK and makes key recommendations for government to grow investment in green infrastructure at the speed and scale needed to meet the objectives of the Clean Growth Strategy and 25 Year Environment Plan.
Today, the Aldersgate Group publishes a new report Towards the new normal: increasing investment in the UK’s green infrastructure. This report, which concludes a one-year research project underpinned by multiple interviews with businesses and investors, argues that overcoming the barriers currently limiting private investment in green infrastructure is essential to delivering the Government’s economic, industrial and environmental policy objectives. It sets out key recommendations for government, businesses and investors to unlock greater volumes of private investment to meet the objectives of the Clean Growth Strategy, Industrial Strategy and 25 Year Environment Plan.
This report will be launched at an event hosted by Bank of America Merrill Lynch at 11.30 on Monday 12th March .
Increasing private investment in green infrastructure represents a huge opportunity for the UK. It is a growing market for the professional services industry, and is a crucial way of reducing the cost of capital to meet the UK’s environmental and industrial policy objectives, presenting a significant opportunity in terms of job creation and potential exports. There is real urgency: up to £693bn investment in low carbon infrastructure will be needed by 2031 in the UK  to deliver policy objectives, with $90tn needed worldwide over the next 15 years .
To tackle the huge investment needs ahead and maximise the opportunities from a growing green investment market, this report puts forward 30 recommendations for government, business and investors. In particular, the report recommends that the UK government should:
Commit to support the growth of green investment over the long term through the Clean Growth Inter-Ministerial Group, with a stated remit to boost green finance up to and beyond the delivery of the fifth carbon budget
Set long-term visibility and transparency on policy direction through multi-year, cross-party frameworks, as has been the case with carbon budgets and the coal phase out, noting that after Brexit, EU-led policy drivers for investment may cease to apply. Government should build on the progress made in the Clean Growth Strategy (CGS) and 25 Year Environment Plan (25YEP) with greater policy detail to deliver ambitions, such as through measures to ensure all existing homes reach a level of energy efficiency of EPC band ‘C’ by 2030
Engage a wider base of investors by establishing the potential size of the market for different infrastructure needs within the CGS, 25YEP and forthcoming Resources and Waste Strategy, such as expected spending on low carbon transport infrastructure, to help clarify the investment opportunity
Expand UK reporting requirements to capture a larger set of reporting companies in the immediate term, and set a medium-term target for mandatory introduction of the recommendations from the Taskforce on Climate-related Financial Disclosures (TCFDs)
Adjust financial regulations to encourage long-term investment in green infrastructure, including through introducing a legal duty for all fiduciaries (such as pension fund trustees) to consider financially material environmental and social governance (ESG) risks and considering how a green supporting factor could help address market barriers arising from capital weighting requirements
Introduce flexible and smart regulation to generate reliable revenue streams for investment in newer or complex markets like natural capital and energy efficiency, including a legally binding environmental net gain approach, as promised in the 25YEP, and the resumption of a carbon price escalator from the 2020s
Ensure that all planned infrastructure spending passes a ‘green’ test to avoid locked in emissions and maximise resilience against flooding and future climate-related impacts
Create targeted funds with cornerstone public funding to tackle difficult or less mature investment areas, such as domestic energy efficiency and natural capital, with a requirement to leverage in private capital and recycle funds for reinvestment
Embed sustainability requirements in all public procurement, including supporting local government with standardised Power Purchase Agreements and energy management services contracts
Issue a sovereign green bond and municipal green bonds to help fund the delivery of the 25YEP and CGS and address a potential drop in financing from institutions such as the European Investment Bank
The report, which comes shortly ahead of the publication of the government’s Green Finance Taskforce recommendations, brings together findings from the Aldersgate Group’s year-long project on green finance with the Centre for Understanding Sustainable Prosperity (CUSP) .
The report is released in conjunction with four separate briefings from the Aldersgate Group, which explore in detail several of the specific barriers and solutions to key types of green infrastructure investment: Increasing investment in domestic energy efficiency; Increasing investment in commercial energy efficiency; Increasing investment in low carbon power, and; Increasing investment in natural capital, which was first published in November 2017.
Alex White, lead report author and Senior Policy Officer, Aldersgate Group, said: “Over the next three decades, the UK needs hundreds of billions of private investment in green and resilient infrastructure to meet the objectives of the Clean Growth Strategy, Industrial Strategy and 25 Year Environment Plan. But investment isn’t happening fast enough on its own. Government must catalyse action on green infrastructure investment now to move the financial system towards a new normal if we are to meet our policy goals cost effectively while maximising benefits for UK plc.
This should include making a long-term commitment to address the structural barriers to infrastructure investment in the financial system, helping establish new and profitable markets through targeted government investment in complex green infrastructure areas and, crucially, building an investment pipeline through greater clarity and visibility of future policy.”
Jane Pilcher, Group Treasurer, Anglian Water, said: “We welcome this new report from the Aldersgate Group and its call to support the growth of green investment over the long term. Anglian Water has committed to a range of ambitious environmental goals, including pledging to become a carbon neutral business by 2050. We have already reduced embodied carbon by 55% from a 2010 baseline and we aim to reach 60% carbon reduction by 2020. Based on this work we were able to issue the very first public utility sector green bond and we are pleased that this is featured as a case study in the report.”
Steve Waygood, Chief Responsible Investment Officer, Aviva Investors, said: “At Aviva Investors we are committed to being long-term, responsible investors. We welcome this new report from the Aldersgate Group and its clear and realistic solutions to unlock greater flows of investment in low carbon infrastructure, particularly clarifying fiduciary duty and the need for mandatory introduction of the TCFD recommendations.
We also welcome the call to use the dormant assets within the insurance and investment sectors to introduce a national financial literacy campaign to educate people about how their money is invested and how this shapes the world they retire into. This would help create sustained demand for sustainable investment, helping to grow the UK economy on a longer term and more sustainable basis for the future.”
Tim Jackson, Director, Centre for the Understanding of Sustainable Prosperity, University of Surrey, said: “Prosperity depends on us investing wisely in a resilient, green infrastructure fit for the future. The Aldersgate Group’s new report provides the kind of visionary and yet pragmatic steps required to achieve this task. All we need now is clear-sighted governance to put these recommendations into practice, and to ensure that our financial system works in the service of a sustainable and lasting prosperity for everyone.”
Emma Howard Boyd, Chair, Environment Agency, said: “Some businesses are already alive to the risks and opportunities presented by climate change, but not enough. The UK can show international leadership with financial innovation to counter increased risks from droughts and storms. The Government’s Green Finance Taskforce is currently discussing how to accelerate investment in resilience, so this report is timely and helpful.”
Edward Northam, European Head, Green Investment Group, said: “The UK has made extraordinary progress towards its climate goals for 2020, demonstrating private investors’ appetite for low carbon infrastructure and building a world-leading capability in green finance.
With the nation facing more demanding objectives in the next decade and beyond, this report sets out a collaborative framework for government and investors that could prove vital in managing risk, mobilising capital and securing the next generation of green infrastructure investment.”
Morten Sørensen, Senior Project Finance Specialist - Financial Solutions, MHI Vestas Offshore Wind, said: "The Aldersgate Group's report on green finance provides valuable and quick insight into the finance requirements needed to drive further growth of the UK’s low carbon technologies. These investments are significant and have long repayment horizons. At MHI Vestas Offshore Wind, we share the view that long-term planning and the right policy environment is required, such as through continued CfD auctions to attract greater private sector investment.
This report recommends solutions to bridge the gap in investment between current levels of finance and what we need to meet the UK’s climate targets, and we welcome the report’s support of offshore wind as playing a crucial role in this.”
 Towards the new normal: how to increase investment in the UK's green infrastructure. This event will be held from 11.30am - 1.00pm on Monday 12th March at Bank of America Merrill Lynch, 10 Newgate Street, London, EC1A 7HD. Chaired by Martin Wolf CBE, Chief Economics Commentator at the Financial Times, the event will open with introductory remarks from Abyd Karmali, Managing Director - Climate Finance at Bank of America Merrill Lynch. Panellists include Jane Pilcher, Group Treasurer, Anglian Water; Steve Waygood, Chief Responsible Investment Officer, Aviva Investors; Emma Howard Boyd, Chair, Environment Agency; Gavin Templeton, Head of Sustainable Finance, Green Investment Group; and Peter Highmore, Lead Transaction Manager - Structured Solutions, Ørsted.
 Vivid Economics (October 2011) The economics of the Green Investment Bank: costs and benefits, rationale and value for money
 New Climate Economy (2016) The sustainable infrastructure imperative
 The Centre for Understanding Sustainable Prosperity is an international, multi-disciplinary research project, addressing not just the economic aspects of sustainable prosperity, but also its social, political and philosophical dimensions. Working closely with business, social enterprise, civil society and government, the Centre aims to develop pragmatic steps towards an inclusive economy that works for everyone. www.cusp.ac.uk
Reacting to the announcement of the Department of Business, Energy and Industrial Strategy’s green finance taskforce today, Nick Molho, Executive Director of the Aldersgate Group said: “The creation of a new taskforce on green finance is a very positive move forward and we are delighted to have been asked to assist the work of the taskforce. Investment needs in the green economy are ever-growing, with the Committee on Climate Change estimating the total annual investment needed to meet the UK’s fifth carbon budget at approximately £22bn . Meeting domestic and international policy commitments on climate change and the environment will therefore require a significant amount of affordable private finance. With growing strengths in areas such as offshore wind and electric car manufacturing, the UK now faces a unique opportunity to broaden its competitive advantage in the low carbon economy by establishing itself as a world leader in the provision of green finance."
Nick Molho added: "The Aldersgate Group has been looking at ways of increasing private investment in green infrastructure through our work with the Centre for Understanding Sustainable Prosperity (CUSP). We look forward to using our findings to support the UK government in developing a green finance strategy to underpin the forthcoming Clean Growth Strategy and the Industrial Strategy.”
 Committee on Climate Change (November 2015) Advice on the fifth carbon budget. £22bn figure based on 1% of £2.23tn GDP in 2015 (US$2.86tn) World Bank national accounts data http://data.worldbank.org/indicator/NY.GDP.MKTP.CD
Reacting to today’s announcement of Macquarie’s completed purchase of the Green Investment Bank (GIB), renamed the Green Investment Group (GIG), Nick Molho, Executive Director of the Aldersgate Group, said:
“Following the successful completion of the sale of the GIB today, we call on the new Green Investment Group (GIG) to honour their commitment to support investment in the UK’s renewable energy infrastructure. The GIG is ideally placed to lead private sector investment in UK green infrastructure projects and help deliver key government policy commitments such as those that will be set out in the upcoming Clean Growth Plan.”
Nick Molho added: “Delivering the government’s ambitions under the Clean Growth Plan and 25 Year Environment Plan will require supporting novel technologies and business models which may initially struggle to access finance. Now that the sale of the GIB is complete and given that the UK’s access to funds from the European Investment Bank is likely to be more restricted after Brexit, the government needs to develop a clear finance strategy in the near future. This strategy should aim to crowd in private sector investment in the new technologies and business models the UK will need to deliver on its environmental commitments and build a thriving low carbon economy.”
Reacting to the publication today of the Progress Report from the Committee on Climate Change, Nick Molho, Executive Director of the Aldersgate Group said:
“If the UK is to significantly cut its emissions and modernise its buildings, energy and transport infrastructure in the next 15 years, the private sector must urgently understand the scale of the UK’s ambitions and the market arrangements under which it can invest in that infrastructure. Greater clarity is particularly needed on the policies that will drive emissions reductions in domestic and commercial buildings.”
“The EU referendum and recent General Election have resulted in some understandable delay in developing such a plan for businesses and investors. However, if low carbon infrastructure is to be delivered on time, at the lowest possible cost and in a way that grows UK supply chains, the government must deliver on the Minister’s intention to publish the Clean Growth Plan when Parliament returns from the summer recess.”
Reacting to the key findings of the Progress Report on the UK’s adaptation to climate change, Nick Molho added:
“The limited progress being made to tackle the degradation of the UK’s natural environment and better protect its infrastructure from the impacts of climate change is concerning. In the coming year, we need to see a concerted effort across government departments to develop a detailed National Adaptation Plan and 25 Year Environment Plan. These plans must attract much greater investment to improve the state of key natural resources such as coastal wetlands, peatlands and soil and ensure the UK’s infrastructure and economy are resilient in the face of more extreme weather events.”
Reacting to the publication today of the final recommendations by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD), Nick Molho, Executive Director of the Aldersgate Group said:
“The publication of the TCFD’s industry-led recommendations cements the importance within the investment and business communities of disclosing the physical, regulatory and commercial risks linked to climate change. There is growing recognition that understanding how this information may impact company or asset performance is essential to enable businesses to make sensible long-term strategic decisions and to give investors the information they need to shift their investments towards more resilient and lower carbon business models.”
Nick Molho added: “These recommendations on standardised voluntary disclosure will act as an influential guide for investors and businesses across the economy. However, in light of the urgency of tackling climate change, mandatory regulations remain essential to ensure that climate-related disclosure is widely adopted in the near future and is consistent and comparable between companies of a same sector. Given the UK’s aim to become a hub for green finance, the government should take note of the ambition of these recommendations and strengthen the breadth and scope of its own mandatory carbon reporting regulations in line with the industry standard.”
Reacting to today’s announcement that Macquarie will be the new owner of the Green Investment Bank (GIB), Nick Molho, Executive Director of the Aldersgate Group, said:
“The GIB has added real value to the UK green infrastructure market through a focus on funding novel green infrastructure projects and crowding in additional private sector investment. We are pleased to see that Macquarie has committed to investing £3bn over three years to grow the GIB’s activities. This is a promising start – particularly combined with its recognition of the skills and expertise of GIB employees in both London and Scotland.
We call on Macquarie to honour these commitments and ensure the GIB plays its part in financing the green infrastructure that will be essential to delivering the UK’s climate and environmental policy objectives in the years ahead. Going forward, we also expect the GIB to continue to engage with stakeholders and report transparently on the impact of its green investments.”
Nick Molho added: “Now that the GIB has been fully privatised and the UK can expect to receive less funding from the European Investment Bank post Brexit, the government must ensure that it has a clear strategy in place to attract private finance to deliver its environmental and low carbon policy objectives. Projects involving new technologies and business models will be required to deliver the UK’s Clean Growth Plan and 25 Year Environment Plan. Targeted government support will be essential to make these projects attractive to private investors such as pension funds.”
Reacting to the Green Investment Bank’s completion of its offshore wind fund, Nick Molho, Executive Director of the Aldersgate Group said:
“The completion of the Green Investment Bank’s offshore wind fund shows that the GIB has played an important role in increasing private sector investment in offshore wind and critically, attracting new kinds of investors to the sector such as local authority pension funds. If privatisation of the GIB goes ahead, the government will have to ensure that it has a clear strategy in place to attract private sector investment in the novel green infrastructure projects that the UK needs to decarbonise its economy.”
Civil society and business groups have set 5 tests against which any prospective buyers of the Green Investment Bank will be assessed, calling on them to commit to measures that will ensure it continues to act and invest in the public interest.
The Green Investment Bank ‘Public Interest Prospectus’, launched today, sets out the 5 tests which any prospective owners must pass.
Prospective buyers of the GIB should commit to:
Nick Molho, Executive Director of Aldersgate Group said: “What has made the Green Investment Bank unique to date hasn’t just been its focus on green infrastructure but the fact that it has been a step ahead of the market, by supporting projects that weren’t attracting sufficient levels of private sector investment. This focus on supporting novel projects, such as complex NHS energy efficiency schemes and offshore wind projects using cutting-edge technology, has allowed the bank to make a real difference by supporting innovation, accelerating cost reductions and delivering supply chain benefits to the UK.
It is in the interest of both the future owners of the GIB and the UK public that funded its creation for the bank to retain its market strength in these areas and to continue to provide genuine added value to the UK’s green finance sector.”
Karla Hill of ClientEarth said: “The GIB is a unique institution, integral to supporting the UK’s cost-effective transition to a low-carbon economy. In the coming years we will need investment in our most important green projects – which is why we have to protect the GIB and its special character now.”
Sepi Golzari-Munro, Head of the UK Programme at E3G said: “To stand any chance of winning civil society and business support, any new investors must commit to maintaining the GIB’s integrity as a single, functioning institution and to deploying at least £4bn of new GIB capital in the UK’s low carbon economy over the next three years. Nothing less will do. “
Angela Francis, Economist at Green Alliance said: “If the GIB can continue to provide first of a kind finance to green projects it will remain a powerful institution, but if this sale leads to the bank losing its distinctive leadership role in market, it will be written up as an experiment that failed”
Doug Parr, Policy Director at Greenpeace UK said: “If Government abandons giving the Green Investment Bank the clarity of purpose that made it such a special institution, then the investors who take it over will need to step up to the plate.”
Reacting to the announcement on the start of the sale process for the Green Investment Bank (GIB), the Aldersgate Group welcomed the government’s rethink to create a special share in the GIB but reiterated that maintaining the GIB’s focus on novel projects under its future ownership was key to its long-term value added and success.
Nick Molho, Executive Director of the Aldersgate Group said: “What has made the GIB unique to date has been its ability to be a step ahead of the market by supporting projects that weren’t getting sufficient support from mainstream private investors such as complex energy efficiency projects and offshore wind farms using new technologies. This focus on projects that are both green and novel has allowed the GIB to help tackle important market failures in the area of green infrastructure. Identifying investors with a clear plan and commitment to maintain this current focus must be an important part of the GIB sale process.”
Following the announcement made by the Secretary of State for Business, Innovation and Skills Sajid Javid this morning, the Aldersgate Group stresses that any reforms to the Green Investment Bank must ensure that its public mission to reduce risk for investors in low carbon and environmental projects remains firmly in place. In addition, the government must retain a significant and sufficient shareholding in the Bank to convince the market that it remains firmly behind its mission.
The Aldersgate Group, whose business members represent a wide range of economic sectors and a collective turnover in excess of £300bn, is strongly supportive of the positive impacts that the Green Investment Bank (GIB) has had in reducing the cost of capital, increasing the quality of projects and mitigating policy risks for its mandated areas of investment
From significant co-investments in efficient street lighting to major offshore wind projects, the GIB has played an important role in reducing the risk profile of some low carbon projects that were harder to finance and has already mobilised over £5bn of investment in the UK’s low carbon economy.
The right level of private ownership in the GIB should be agreed through transparent analysis and in-depth consultation with the finance community to determine the optimum level of government shareholding that continues to maximise private finance's willingness to invest in the green economy throughout the lifetime of this parliament and beyond.
Nick Molho, Executive Director of the Aldersgate Group, said: “The injection of private capital into the Green Investment Bank could be a positive development but only if the Bank’s public mission to drive investments in low carbon projects perceived as riskier is fully maintained and the government retains at least a significant shareholding, allowing it to demonstrate a meaningful stake in the continued success of the Bank.
Failure to provide such reassurance would, just a week after retrospective policy changes on onshore wind, send negative signals to low carbon investors, threatening inward investment flows and undermining the low carbon sector’s important contribution to the UK’s continued economic recovery.”
Nick Molho added: “With a few months to go ahead of the climate change summit in Paris, it is also critical that the UK’s positive leadership in these negotiations does not become undermined by a perception abroad that the government is diluting its domestic commitments and abandoning its own stake in the future growth of the UK’s low carbon economy. Retaining at least a significant holding in the Green Investment Bank and making rapid decisions in key areas such as the future of the levy control framework will be key here.”
The Aldersgate Group also reiterated some of the key recommendations from its recent cross-industry report on the future of the Green Investment Bank, highlighting the importance going forward for the Bank to have greater flexibility in leveraging private finance and in investing across a broader range of environmental projects such as those aimed at improving the state of the UK’s natural capital.
The Aldersgate Group launches a new report today (28th October), at a high profile event in central London with Secretary of State Vince Cable to mark the GIB’s first two years of operation.
The report highlights the GIB’s impressive achievements but urges the next Government to increase the power and remit of the GIB to ensure it provides the necessary support to the UK’s growing green economy.
All contributors congratulate the GIB’s achievements and welcome the cross-party support that has provided it with firm foundations. In its short lifespan the Bank has demonstrated that investment in green infrastructure can be profitable, has drawn in new sources of private sector capital and contributed to the UK’s position as one of the world’s most attractive destinations for private sector green investment.
Peter Young, Chair of the Aldersgate Group and one of the editors of the report said: “The GIB’s achievements are all the more remarkable considering the restrictions within which it has operated. The government must now broaden the Bank’s remit into new sectors and grant it the ability to borrow, by issuing new products such as green bonds and ISAs. This will widen its impact, increase its leverage and allow the general public to invest in the clean, green industrial revolution that is essential to secure our future wealth and wellbeing.”
Andrew Raingold, the Executive Director of the Aldersgate Group, has told the Environmental Audit Committee that the Government is "running out of options" to deliver on its pledge to be the greenest government ever "if there is less Government spending available (and) if there is less appetite to regulate". He said that greater leadership was required to drive "sensible" fiscal reform and "best value" public procurement.
As an oral witness to the Committee's inquiry on An Environmental Scorecard, Mr Raingold said: "A priority for the next Government should be sensible fiscal reform which seeks to raise taxes on damaging activities like pollution and reduce taxes on beneficial activities like work. The Office for National Statistics shows that the proportion of environmental taxation has fallen during this Parliament. If this trend were reversed over the next five years and delivered in a smart way, there would be benefits for growth, jobs and wellbeing."
The report gives the Government a ‘red card’ for its efforts to reduce health-damaging air pollution, protect biodiversity and prevent flooding in a scorecard assessment of its green policies during this Parliament.