British Chancellor unveils new Green Finance Institute

Competition to attract the global market in sustainable finance is increasing.

The UK’s Chancellor of the Exchequer, Phillip Hammond, has announced a new Green Finance Institute to solidify London’s role as the go-to destination for this new work.

In a speech to a group of financiers last week, the Chancellor drew attention to how the UK is “already leading the charge in this market” with 78 green bonds being raised worth $24.5 billion.

“But if we are collectively to meet our global climate goals, we will need to mobilise $90 trillion by 2030. And it is my ambition that the UK leads the world in financing this investment,” he added.

The market for green bonds reached $155 billion in 2017 and has increased by 80 percent in five years. Some leading climate leaders, such as the UN’s Christiana Figueres, are campaigning to raise this to $1 trillion by 2020.

The launch of the new institute, to be jointly funded by the government and the City of London Corporation aims to make the capital a “one-stop shop for world-leading climate science, and for capital”.

While London remains the global capital for green finance, it faces stiff competition from other European capitals, such as Paris, Amsterdam and Frankfurt.

Catherine McGuinness, Policy Chairman of the City of London Corporation said the new institute will “bring together the UK’s existing capabilities, create new business opportunities, and communicate to the wider market what London’s offer is in green finance and insurance”.

The creation of a specific institute to promote green finance in the capital comes on the back of a recommendation from the Green Finance Taskforce. The group of experts published a report in March, commissioned by the Chancellor, on how to accelerate sustainable finance in the UK.

The report also recommends the government issues a sovereign green bond, increase investment in clean technologies, and drive demand for green financial products.