Government invests £10 million for new ‘world-class’ green finance hubs

Leeds and London are set to become home to a new UK centre for driving global green finance and investment, Energy Minister Anne-Marie Trevelyan announced today (Monday 15 February).

Using £10 million in government investment, the new UK Centre for Greening Finance and Investment will begin in April 2021, with physical hubs in Leeds and London opening a matter of months later led by a partnership with a number of UK institutions including University of Oxford, the University of Leeds and Imperial College London.

The research hubs in the two cities will aim to provide ‘world-class’ data and analytics to financial institutions and services such as banks, lenders, investors and insurers around the world to better support their investment and business decisions by considering the impact on the environment and climate change.

This new centre will advance the UK’s leadership in green finance and bring forward the day when firms can access environmental data and analytics for every place on Earth, past, present and future

The new centre will equip banks with the latest environmental and scientific intelligence to help companies of all sizes, including start-ups, anticipate, adapt and gear up for the risks posed by climate change, government says.

This research will also set out to help create new products and services that tackle climate change, such as technologies that measure severe storms and flood risks for property investors and tools that can improve data on industrial pollution linked to investment portfolios.

These new green finance hubs will also attract and develop new green finance talent from around the world to the UK’s major cities, government says.

‘Unlocking opportunities’

The UK government says the hubs will ‘unlock brand-new opportunities for Britain to lead internationally in greening global finance, positioning Leeds and London as global centres for green finance while also protecting the UK economy and society from climate and environmental risks such as extreme weather events, flooding, major biodiversity loss and water crises’.

Economic Secretary to the Treasury and City Minister John Glen said: ‘We’ve set the ambition for net zero – now we must ensure our financial sector has the tools and information to get behind the transition.

‘We’re already improving the climate data available by mandating TCFD-aligned disclosures across the economy and implementing a green taxonomy.

‘This new centre will advance the UK’s leadership in green finance and bring forward the day when firms can access environmental data and analytics for every place on Earth, past, present and future.’

Centre for Greening Finance

It is estimated that successfully reducing climate change and adapting to life in a changing climate will deliver multi-trillion pounds of additional private sector investment every year.

Government says the new Centre for Greening Finance and Investment will help ‘divert investment away from unsustainable activities’ such as deforestation and fossil fuels, and towards low carbon sectors, creating green jobs, building industries of the future, and ensuring the climate and environment at the heart of UK financial decision making.

The Bank of England’s executive sponsor for work on climate change Sarah Breedan said: ‘Integrating climate and environmental data and analytics into decision making will allow financial institutions to identify, measure and manage the financial risks and opportunities from climate change, and so support the Bank’s objective to ensure the financial system is resilient to these risks and supportive of the transition to net zero.

‘The Bank of England is delighted that the CGFI will support firms’ efforts in this important area, including for the forthcoming Climate Biennial Exploratory Scenario.’

Chair of the Environment Agency and Chair of the CGFI Advisory Board, Emma Howard Boyd said: ‘We don’t have time to lose, the benefits of properly pricing climate and environmental risk are estimated to be worth trillions of dollars every year.

‘Closing investment gaps, by avoiding investments in at-risk assets and improving the efficiency of capital allocation across society, will speed up net zero, nature recovery and our preparations for climate impacts like storms and droughts.

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