UK Government funding for new green finance centres
A new centre to drive global green finance and investment funded by the UK government will soon launch. UK Research & Innovation (UKRI) – the government body directing funding for research and innovation – will provide an initial investment of £10m to set up the UK Centre for Greening Finance & Investment (CGFI).
The centre will open in April 2021 with two physical hubs in London and Leeds backed by universities and other institutions around the UK. Its brief is to provide green-tinted advice globally to lenders, investors and insurers helping them to make environmentally sustainable decisions.
The new centre will have access to the latest environmental and scientific intelligence and use it to provide data and analytics to companies of all dimensions – including start-ups – to anticipate and prepare themselves for risks caused by climate change. Analysis of meteorological data will help property investors at all levels to measure the impact of extreme weather events, flooding, storm risks and the impact of industrial pollution on investment portfolios.
Recipients of CGFI advice will be guided to divest money away from activities which imperil the environment – such as coal-fired power and deforestation – towards less detrimental activities such as sustainable agriculture or renewable power.
There is also the hope – and expectation – that the centre will attract talent from around the world to help the UK become a leading centre for green finance. Announcing the new centre on February 15th, Minister for Business, Anne-Marie Trevelyan said it would “encourage financial services to…focus on sectors and companies [with] a smaller environmental footprint…creating thousands of jobs across the country ensuring we build back greener”.
This is very much “on-message” with pronouncements in the government’s Energy White Paper from December and its 10-Point Plan for a “green industrial revolution” announced in November. However, the headline-grabbing rhetoric behind these announcements has come under scrutiny due to Downing Street’s subsequent actions:
Replying to a question in the House of Commons on February 2nd, the Minister for Business confirmed that only £300m of the much-heralded £2bn funding for the Green Homes Grant was being rolled over to the new financial year.
Claims made in the 10-point plan for developing the UK offshore wind sector are heavily reliant upon private investment.
On February 9th, plans for a new deep coal mine in Cumbria appeared to be in peril after conflicting messages saw the government’s green credentials widely criticised.
However, amid such obfuscation and mixed messages, praise is due for the environmentally positive impact facilitated by some of the less-heralded awards and grants awarded by government agencies. UKRI has played a vital role here with the UK CGFI just the latest instance of how they provide funding for ground-breaking environmental work.
The Green Finance Institute – another government-backed body – dispenses advice, liaises between diverse groups to help formulate a coherent approach and helps to circumvent bureaucratic obstacles where possible. The Energy Entrepreneurs Fund has provided invaluable funding to start-ups who have gone on to have a significant positive impact on the environment.
A consistent policy of allowing these expertise-led institutions more and more scope to guide industry and business along an environmentally-friendly pathway would pay dividends.