UK policy inertia puts at risk billions in climate capital, survey shows

The British government is driving billions of pounds of investment away from the UK by failing to provide clear policies to support the transition to a low-carbon economy, a survey of 100 financial services firms showed on Wednesday.

Britain has positioned itself as a world leader in sustainable finance but its leadership is under threat from a lack of clear policymaker support, the UK Sustainable Investment and Finance Association (UKSIF) said.

Two-thirds of the firms, which represent in all around 1 trillion pounds ($1.26 trillion) in annual turnover and 200 billion pounds in green investments, said they have already moved or plan to move investments out of the country to a market that is more supportive of their sustainability goals.

James Alexander, CEO at UKSIF, said Britain was at a “crucial inflection point” that could see it benefit from billions of pounds of investment, or “drive away much needed private capital in the UK”.

Delays in implementing the UK’s green taxonomy – a list of climate friendly activities – and slow progress on adopting global standards for corporate climate reporting from the International Sustainability Standards Board were examples of where investors wanted to see faster action, UKSIF said.

Alexander called for the introduction of mandatory corporate transition plans, greater clarify on the fiduciary duty of pension schemes as it relates to climate finance and a push to embed biodiversity into the regulatory framework.

Actions like these, UKSIF said, could unlock some 100 billion pounds of investment in the national economy, with 95% of respondents to the survey saying they would increase investment if favourable government policies were implemented.