A group of financial institutions managing assets worth £1.5tn have expressed their concerns about the UK’s net zero transition in a letter to Rishi Sunak.
Their apprehensions stem from recent policy signals which they feel have dampened confidence in the government’s commitment to climate change policies.
As the global race to invest in cleaner energy systems intensifies, with major economies like the U.S., EU, and Canada unveiling huge energy transition investment plans, the UK risks falling behind due to policy uncertainty.
UKSIF, which has 36 members, points out that ministers’ recent comments are weakening investor trust and jeopardizing the UK’s leading position in the clean transition.
UKSIF Chief Executive James Alexander said, “The global competition to capture billions of pounds of private investment in the clean industries of the future is intense. Ministers’ recent remarks are undermining investor confidence and putting the UK’s net zero head start at risk.”
The investors noted, “Building on the UK’s position as the world’s largest net exporter of financial services, sustainable finance is a major growth industry in the UK. Purposeful and predictable policy at home can position the UK financial services sector as a global leader in green investment, driving further prosperity and growth, including in emerging financial services centres outside London.”
The UK government set a goal in 2019 to achieve net zero emissions by 2050. Subsequent policies and investment pledges were introduced to accelerate low carbon transport, boost clean energy, and facilitate industrial decarbonisation.
The Green Finance Strategy, updated recently, aims to position the UK as a global hub for green finance and aligns financial sector initiatives with global and local climate targets.
Recent decisions by the Sunak government, like the approval of North Sea oil and gas drilling licenses, as well as opposition to the 2030 ban on new petrol and diesel vehicles, pose risks to the UK’s leadership in clear and confident policymaking for net zero.
The investor group estimates £50-60bn investment is needed for the UK’s net zero targets and urges the government to provide consistent policy direction to ensure the necessary investments.
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