New report says all financial services firms will have green offering by 2024

TLT research reveals the UK’s green finance industry is making significant headway, with many financial services firms beginning to sow seeds in the green finance market.

The ‘Safety in numbers: levelling the playing field for green finance’ report has assessed the state of green finance and analysed survey responses from senior decision makers across the UK financial services sector.

Data shows 39% of financial services firms have already launched green finance products or offerings, with this expected to increase by 53% in 12 months. Then by 2024, all financial services firms are expected to have green offerings.

Despite majority of financial services firms having not yet launched green offerings, survey findings show 61% of respondents have prioritised setting a strategy, 51% are gathering data and 42% are measuring performance.

Internal leadership efforts are also being made, with 91% having hired, or planning to hire, a dedicated and experienced C-level or non-executive expert in green finance.

Financial services firms are becoming increasingly cognisant of the role that green finance will play in the industry moving forward, with more than half of respondents saying green finance is “critical” or “very important” to their business.

Firms believe demand for green finance varies, with 87% of firms stating that investors demand for green finance is “strong” or “moderate”. This figure falls to 81% for customers and shareholders, and 80% for government.

The report states there is a lack of optimism around the impact of recent government announcements on green finance, suggesting more sector support is needed.

Respondents report the barriers to adopting green finance including cost, macroeconomic concerns, a lack of relevant expertise on the board and challenges with measurability.

However, tax incentives, subsidies or grant schemes and green securitisation can help alleviate these challenges.

Robin Penfold, partner at UK law firm TLT, comments: “Many firms have already made significant progress in establishing green finance strategies, collecting data and measuring performance, as well as turning their attention to the development of green financial products, which we expect to see a lot more of in 2022.”

“However, there is still a long way to go. The demands from financial services firms are clear – they want bold action from regulators and policymakers to support the transition to a financial services sector where green finance becomes the norm – it requires public and private sector collaboration.

“Green finance is an opportunity for the entire industry to come together, with government and regulators, to develop the future landscape for the financial services sector.”