Finance industry warns UK Prime Minister of consequences of climate wavering

Investment managers, banks, asset owners and other financial institutions, have warned that the government’s recent rhetoric risks stopping the finance sector from making the transformative investments needed to reach net zero and grow the economy.

The industry has warned that without long-term clarity from government, the £50-60bn per year of investment needed to reach net zero won’t happen.

The warning comes in a letter sent to the Prime Minister, signed by 36 financial institutions that are members of the UK Sustainable Investment and Finance Association including Jupiter Asset Management, Scottish Widows, Aegon, and Royal London.

The finance sector is urging the government to provide long-term policy certainty to ensure the UK is a world leader in sustainable finance, by making clear that important policy pillars driving investment, like predictable carbon pricing mechanisms, the transition to EVs, and improved energy efficiency standards for housing, will not be changed abruptly.

When the Government looks committed on climate change, investors follow and can channel private capital into new technologies and projects that will decarbonise the country.

James Alexander, Chief Executive, UK Sustainable Investment and Finance Association 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 major financial players are deciding where to invest, and the UK needs to look both attractive and consistent as a leading destination for sustainable investment.”

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