June, 2022 -The government’s asking the public’s opinion on how far and fast it should ‘green’ our financial system. So thousands of us are responding to its Green Finance Strategy survey. This strategy has the potential to accelerate green investment in infrastructure, local communities, and jobs – but only if the government acts boldly…
Along with some of our partners in the climate and new economy movement, Positive Money is submitting a fully evidenced response to the government’s survey which is open until 22nd June. Below we have detailed some key points and policies we are asking for in the strategy.
If you would like to send your own email response (which we’re encouraging all our supporters to do!), the points below might be useful inspiration:
- We need ambitious action now: The UK’s financial sector requires ambitious action to become “green” or “Net Zero aligned”: last year just five UK banks invested £35 billion of new money into fossil fuels, showing how much work remains to be done. According to the Bank of England’s own calculations, climate change could cost UK banks £340 billion if action is delayed.
- We need stronger regulation to actively shift money out of risky fossil fuels: The government should equip regulators with a new statutory objective, which requires them to align the UK’s financial sector with no more than 1.5 degrees of warming. Regulators should use their existing green mandate to implement high impact policies, including a ‘One for One’ rule (also known as climate calibrated capital requirements): for each pound that banks and insurers finance new fossil fuels, they should have a pound of their own funds liable for potential losses.
- Fossil fuels cannot be defined as green assets: When classifying which lending counts as “green”, the UK Taxonomy (a document which determines what activities are defined as sustainable on investors portfolios) must exclude all fossil fuels, including gas production and extraction.
- We need to unlock investment in renewable energy: The government should develop a Green Investment Toolkit, to increase public and private investment in green infrastructure. This should include: a lower interest rate for green lending, scaled up public investment, targeted money creation for local environmental transitions, and quotas of lending to sustainable sectors for banks seeking central bank loans.
- We must protect nature: Financial institutions should be required to disclose and stop their financing towards environmentally destructive activities, such as deforestation and species extinction, and align their portfolios with the Post 2020 Global Biodiversity Framework.
- We need to lead internationally: The UK should lead by example within the international community, by scaling up grant-based public climate finance to emerging and developing countries. This finance should be targeted to the most in need communities, through engaging in meaningful consultation with climate vulnerable countries.
Click here to send your email to the government’s call for evidence in 2 minutes now. The deadline to submit your response is Wednesday 22nd June.