Investment is being made in various clean energy projects, with some insurers now looking to meet their ESG and Net Zero targets by investing profits and Life premiums in this sector too. In fact, new report published by the City of London Corporation and Climate Policy Initiative (CPI) has revealed that tracked UK financial institutions have almost tripled their investment into clean-energy projects in just one year, to $2.3bn in 2023. Here’s the latest;
The report, the second From Commitment to Action, revealed that the rate of increase of investments into clean energy projects by 126 tracked UK financial institutions was the fastest across all global financial centres in the study. Together, the five financial centres covered (the UK, the US, France, Germany, and Japan) saw a 59% average increase in clean energy level project investments in 2023 compared to 2022.
The report is being launched by the Lord Mayor of London, Michael Mainelli, at the third annual Net Zero Delivery Summit (NZDS). The Net Zero Delivery Summit is hosted by the City of London Corporation in strategic partnership with the Sustainable Markets Initiative and will convene global financial and corporate leaders, as well as sustainability experts from around the world with a focus on turning commitments made at previous COPs into actions ahead of COP29 in Azerbaijan.
The report, which analyses progress amongst a subset of members of the Glasgow Financial Alliance for Net Zero (GFANZ) – a group of institutions that have committed to achieving net zero greenhouse gas emissions – revealed that significant improvements have been made by key global financial centres across several dimensions. Almost all tracked financial services firms in the study now have formal climate commitments in place and attention is shifting to implementing these commitments and ensuring they are having the impact we need to finance the transition to net zero.
The findings also showed that transparency underpinning financial institutions’ net zero targets continues to improve. By 2023, half of the tracked UK institutions disclosing the level of portfolio coverage of their net zero targets had each set a target covering more than 70% of their invested assets. In comparison, half of institutions tracked in France had set targets covering 60% of their portfolios, while half the institutions in US and Japan had targets with 50% portfolio coverage.
The findings of the report will form part of the discussions at the Net-Zero Delivery Summit where the speakers include: Michael Mainelli, Lord Mayor of London, Chris Skidmore OBE, Chair Mission Zero Coalition; The Rt Hon Patricia Scotland KC, Secretary-General of the Commonwealth; Vanessa Havard-Williams, Chair of the Transition Finance Market Review, Chris Hayward, Policy Chairman of the City of London Corporation; Sabine Mauderer, Chair of the Network for Greening the Financial System; Jennifer Jordan-Saifi, CEO of Sustainable Markets Initiative.
Policy Chairman at the City of London Corporation, Chris Hayward, said:
“We should celebrate the progress financial services institutions made across major global financial centres on the road to net zero. Organisations continue to see the opportunities a net zero economy can offer, across a number of areas of sustainable finance including transition and nature finance.
“It is fantastic to see that UK financial firms continue to lead the way on the implementation of climate commitments. Over the last ten years, the UK’s financial services sector has played a critical role in supporting the transition to net zero globally.”
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