Clean Growth Fund spearheads Government's green finance commitments
As part of Green GB Week, the UK Government has announced a new £40m venture capital fund to help bring innovative clean technologies to market.
The Clean Growth Fund has been announced today (17 October) and consists of £20m in Government funding with a further £20m to be provided by private investors. The new fund will use private sector expertise to identify clean technologies and help to commercialise them at scale.
The Department for Business, Energy & Industrial Strategy (BEIS) will work with the Infrastructure and Projects Authority to outline what datasets can be used to identify infrastructure projects that can be considered green.
Energy & Clean Growth Minister Claire Perry said: “Decarbonising the global economy is a multi-trillion pound opportunity. For decades the UK has been recognised as a leading financial centre and today we’re primed to enhance our already world-leading green finance sector, making sure the bulk of this investment flows through the city of London.
“To mark our first ever Green GB Week, we’re spending £20m to help to create a new investment fund that will provide a shot in the arm for growing UK clean technology start-ups, and creating new standards to streamline the business environment for green finance in the UK.”
The Clean Growth Fund was announced as part of Green GB Week’s Green Finance Day. To mark the occasion, the Government has today announced two new standards for green finance – to be developed by the British Standards Institution – and that the UK will chair a new International Standards Organisation Technical Committee on Sustainable Finance.
The Government has also reiterated that it will work with the Green Finance Taskforce to outline green investment guidelines.
Among the Taskforce’s recommendations was a call for a relaunch of the UK’s green finance activities through a new unified brand, and the integration of the Task Force on Climate-related Financial Disclosures (TCFD) guidelines through the UK’s corporate governance and reporting framework.
The Government will publish the UK’s first ever Green Finance Strategy in Spring 2019.
The UK Government has also announced that the UK/Canada Smart Energy Systems Challenge is now open to applications. The Challenge focuses on how electric vehicles (EVs), smart devices, storage systems and remote connectivity can become mainstream technologies on the electricity grid. The UK and Canada are jointly offering more than £11m to develop storage and grid solutions in order to support the UK Industrial Strategy Clean Growth Grand Challenge.
Welcoming the announcement, the Aldersgate Group’s acting policy manager Alex White said: “It's positive to see that the Government is driving forwards the green finance agenda. In particular, we're encouraged that Government is supporting work on the development of green finance standards and that it is considering how the growth of green finance can have real impacts on infrastructure funding.
“Today’s announcement on quantifying the UK’s pipeline of green infrastructure will help to demonstrate the size of the investment opportunity to the private sector, as well as the gap in planned UK infrastructure we still need to build to remain within 1.5 degrees of global warming.”
The Government is also leading on a new UK PACT (Partnering for Accelerated Climate Transitions). The programme acts as a £60m technical assistance programme, led by BEIS, to implement skillsets across the globe and harmonise green bond standards, green asset analysis and advice on TCFD implementation. The original focus will be on setting up a UK/China Green Finance Centre.
London has been ranked as a global leader in the green finance movement and the London Stock Exchange already features almost 80 green bonds. The Government is keen to work with investors in the city to mobilise action towards green finance.
Earlier this year, the Government announced it will fund a new Green Finance Institute alongside the City of London Corporation to "champion sustainable finance" in the UK and abroad. Once the institute launches next year, the City of London Corporation will invest £2m in the new body.