The Institutional Investors Group on Climate Change (IIGCC) has today listed a series of investor priorities for the next government which could unlock investment and deliver a “green and competitive UK”.
In its Call to Action for UK Government 2024, the group and its investor members urge policymakers to accelerate the UK’s transition to a competitive, energy-secure, resilient, and climate-neutral economy by prioritising five key areas.
Firstly, it calls for the adoption of a “whole-of-government approach” with a centralised strategy to facilitate delivery of net zero targets, including a strengthened whole-of-economy transition plan for the UK and improved cross-departmental collaboration.
The IIGCC also urges the next government to devise a comprehensive green industrial strategy that supports the decarbonisation of the UK economy and boosts economic competitiveness in response to the US Inflation Reduction Act and the EU’s Green Deal Industrial Plan.
This, it explains, should include policies and incentives to encourage greater investment in low carbon energy technologies, while reducing barriers to entry, facilitating greater flows of private finance, and boosting investment in green skills programmes.
The group also calls on policymakers to better fortify the UK against the physical impacts of climate change through a clear policy roadmap to drive strategic investment in adaptation and resilience measures, and integrate the protection and restoration of nature and biodiversity into UK policy.
Finally, the IIGCC urges the next government to implement a supportive financial regulatory environment which facilitates capital flows towards climate and nature goals.
To this end, the group calls on policymakers to swiftly implement key sustainable finance policies to increase transparency and support reorientation of capital towards the UK’s climate and nature objectives, establish UK as a leading hub for transition finance, and ensure the interoperability of UK policies and regulation with international frameworks.
“In this important election year, investors are looking for a supportive policy environment that provides the confidence and certainty needed to make long-term investments in the UK’s transition to net zero,” said IIGCC policy director Emily Murrell. “The building blocks of a sustainable finance framework are beginning to fall into place, but there is an urgent need to move ahead with swift implementation of key pieces of legislation.
“This is an opportunity to shift gears, and pivot permanently towards decarbonisation, channelling efforts into the effective delivery and implementation of policies which support this.”
Murrell added that ultimately success will depend on near-term decisive actions and well-designed policies, effective coordination between relevant stakeholders, and a renewed commitment by the next government to achieving net zero goals – with a particular emphasis on prioritising decarbonisation within the real economy.
“Doing this early in the next government’s term will open up avenues for increased private finance towards the low-carbon transition, fostering a more sustainable and resilient future,” she said.
Tessa Younger, stewardship lead environment at CCLA added that the IIGCC Call to Action emphasises the urgent need for a comprehensive, “whole-of-government” approach to decarbonisation, providing the certainty investors require to fund the UK’s low-carbon transition.
“With the general election approaching, it’s crucial for the government to demonstrate commitment to these pathways, keeping the UK at the forefront in climate action and boosting the economy,” she said.
In response to the IIGCC’s Call to Action, a government spokesperson said: “London has been ranked first in the world for green finance for the sixth consecutive time, and our Green Finance Strategy sets out an ambitious programme to secure the funds needed to achieve our energy security, net zero and environmental targets.”
The IIGCC’s Call to Action comes hot on the heels of the British Standards Institution’s annual Net Zero Barometer survey, which found that more than nine in 10 UK business leaders want more government policy support and financial incentives to help accelerate their transition towards net zero emissions – with many citing green policy uncertainty and costs as major barriers to their decarbonisation efforts.
It also follows a series of reports from the government’s official advisors, including the Climate Change Committee and the National Infrastructure Commission, warning the UK is off track to meet its emissions goals for the 2030s and at risk of seeing green investment migrate to the US, EU, and China unless more ambitious decarbonisation policies are adopted.
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