Lloyds launches £2bn Clean Growth Finance scheme
Lloyds Banking Group has announced it will be providing a further £2bn of funding for sustainable investments, increasing its total UK green finance commitments to £3bn.
The bank’s new Clean Growth Finance scheme incentivises businesses to cut their carbon emissions, switch to renewable electricity and implement energy efficiency measures by offering a discounted lending rate. With the money saved through this rate, businesses can then invest in reducing their environmental impact.
“Businesses will continue to be a source of innovation and seize the opportunities presented by the global low carbon economy,” Lloyds Group’s director of commercial banking David Oldfield said. “Our funding will support small improvements in production, heating, transport, or environmental impact, right through to large scale renewable energy infrastructure.“
To support the new investment scheme, Lloyds has partnered with the University of Cambridge Institute for Sustainability Leadership to provide specialist training to more than 300 Relationship Managers to help them support clients’ sustainability targets.
The announcement follows the Group’s previous pledges to invest up to £1bn in commercial real estate energy efficiency upgrades and renewables projects by 2020. Oldfield said the new scheme builds on Lloyds’ commitments to help clients with discounted finance for investments in sustainable business, enabling the bank to support the UK’s Clean Growth Strategy.
Lloyds is the latest in a string of High Street banks to increase its investments in green business projects in recent months.
For example, Barclays last week launched new green trade loans to help companies secure working capital for activities such as renewable energy, energy efficiency and waste management projects. Last month, it additionally announced its Green Home Mortgage scheme, offering homebuyers preferential interest rates and savings of more than £1,300 on energy-efficient new build houses.
Meanwhile, banking giant NatWest pledged in March to deliver £10bn of lending to UK renewable energy and energy efficiency projects by 2020, having provided £3.5bn for renewables and energy efficiency projects over the past three years.
On a wider industry level, there are concerns the banking industry is failing to disclose and take action on climate-related risks. The UK's high street banks are still profiting from some of the world's dirtiest fossil fuel projects despite committing to deliver the Paris Agreement goals of limiting global warming to below 2C.
The shortcomings of global banks on climate action could undermine efforts to achieve a 2C world, according to a recent damning report backed by more than 100 investors worth almost $2trn in assets.