The UK Government has stepped up its bid to establish London as a major centre for green finance with the establishment of a Green Finance Taskforce and plans to create the world’s first green financial management standards.
It has also officially endorsed the recommendations of the Financial Stability Board’s Taskforce on Climate-related Financial Disclosures (TCFD) (Link to the recent ESG Magazine special issue on TCFD), making it government policy to encourage all listed companies to implement the voluntary framework.
The move comes as global financial capitals ramp up their attractiveness for green finance bond and fund listings. Paris, Frankfurt, Luxembourg, Dublin, Casablanca in Morocco, Hong Kong and Stockholm, have all kicked off green finance campaigns.
The new UK Taskforce includes leading industry figures from the likes of the Bank of England, Aviva and Legal and General (See list below). In a six-month period it will aim to come up with “ambitious proposals to accelerate investment in the transition to a low carbon economy, creating high-value jobs and opportunities for UK businesses”. It will meet for the first time in late September, after which its ‘Terms of Reference’ will be published.
Sir Roger Gifford, the former Lord Mayor of London, and UK head of Skandinaviska Enskilda Banken (SEB), has been the central figure in the UK Government’s drive to establish London’s green credentials. He heads up the Green Finance Initiative and will now also Chair the newly formed Taskforce. Launched in January 2016, The Green Finance Initiative was a joint venture between the UK Treasury, The Department of Energy & Climate Change (DECC) and the City of London Corporation, and was the UK Government’s first major move in establishing London as a centre for green finance. DECC has now morphed into the Department for Business, Energy and Industrial Strategy (BEIS), which is backing the new Taskforce.
The new voluntary “green financial management standards”, which are being developed by the Government in collaboration with the Green Finance Initiative and the British Standards Institute are intended to assure prospective investors in the UK’s low carbon economy of the integrity of green-labelled investments.
The UK says the standards will “promote responsible investment practices” and “provide clarity to financial institutions over the credentials of green financial products”. Claire Perry, UK Minister of State for Climate Change and Industry at the Department for Business, Energy and Industrial Strategy, announced its plans at the opening of Climate Week in New York.She said: “[d]eveloping standards to promote responsible investment in sustainable projects and establishing the Green Finance Taskforce will help ensure businesses across the UK will take full advantage of it”.
Emma Howard Boyd, Chair of the Environment Agency and member of the Taskforce on Green Finance said of the initiative: “The global investment community is adapting to anticipate climate change. Government is doing the same. The transition to a low carbon and resilient economy creates a multi-billion pound opportunity. If our planning and investment keeps one step ahead of climate change we can help deliver a Green Brexit by creating new financial networks around the world.”
Ben Caldecott, founding Director of the Oxford Sustainable Finance Programme at the University of Oxford said: “We are entering the most capital intensive period in human history with clean technologies at the very centre. This will benefit owners and organisers of capital and the City of London is uniquely placed to reap the benefits.”
Members of the Green Finance Taskforce
• Sir Roger Gifford (Chair), Representing the Green Finance Initiative
• Nikhil Rathi, CEO, London Stock Exchange
• Michael Sheren, Senior Adviser, Bank of England
• Robert Trezona, Head, Cleantech, IP Group
• Rhian-Mari Thomas, Managing Director, Barclays
• Daniel Klier, Group Head of Strategy and Global Head of Sustainable Finance, HSBC
• Edward Northam, Head of Investment Banking, Green Investment Bank
• Charlotte Morgan, Partner, Global Energy and Infrastructure Group, Linklaters
• Mark Zinkula, CEO, with Meryam Omi, Head of Sustainability and Responsible Investment Strategy, Legal and General Investment Management
• Steve Waygood, Chief Responsible Investment Officer, Aviva Investors
• Emma Howard Boyd, Chair, Environment Agency
• Bruce Davis, Co-Founder, Abundance
• Fiona Reynolds, Managing Director, Principles for Responsible Investment
• Nick Molho, Executive Director, Aldersgate Group
• Dr Ben Caldecott, Founding Director, Oxford Sustainable Finance Programme, University of Oxford Smith School of Enterprise and the Environment
• Dr Paul Fisher, Senior Associate, University of Cambridge Institute for Sustainability Leadership