New £10million centre to promote greener investment decisions

The government has announced a £10million initiative that will make Leeds and London home to a new centre for driving global green finance and investment.

The new UK Centre for Greening Finance and Investment UK (CGFI) will begin work in April 2021.

Physical hubs in Leeds and London will open later in the year led by a partnership of the University of Oxford, the University of Leeds, Imperial College London, the University of Reading, The Alan Turing Institute, Satellite Applications Catapult and the Science and Technology Facilities Council

The research hubs in the two cities will provide data and analytics to financial institutions and services such as banks, lenders, investors and insurers around the world.

Better decisions

The aim is to better support their investment and business decisions by considering the impact on the environment and climate change.

For example, the new centre will provide banks with the latest environmental and scientific intelligence to help companies of all sizes, including start-ups, take full account of the risks posed by climate change. 

This pioneering research will also help create new world-leading products and services that tackle climate change, such as cutting-edge technologies that measure severe storms and flood risks for property investors and tools that can improve data on industrial pollution linked to investment portfolios.

These new green finance hubs should also attract and develop new green finance talent from around the world to the UK.

Leeds and London: global centres

The vision is to position Leeds and London as global centres for green finance while also protecting the UK economy and society from climate and environmental risks such as extreme weather events, flooding, major biodiversity loss and water crises.

The initiative follows commitments laid out in the Prime Minister’s Ten point plan and the government’s Energy white paper 

It also aims to deliver on pledges made in the government’s 2019 Green Finance Strategy to deliver a pioneering research and innovation programme aimed at enhancing data and analytics on climate and environmental hazards, as well as vulnerability and exposures.

Energy and Clean Growth Minister Anne-Marie Trevelyan said:“While the government has invested billions of pounds so we can end the UK’s contribution to climate change, we will not reach our net zero target without mobilising private capital and unleashing the power of the free market.”

Smaller environmental footprint

She added that the UK Centre for Greening Finance and Investment should encourage financial services to focus on sectors and companies that have a smaller environmental footprint. 

Economic Secretary to the Treasury and City Minister John Glen added: “The new centre will help divert investment away from unsustainable activities such as deforestation and fossil fuels, and towards low carbon sectors, creating green jobs, building industries of the future, and ensuring the climate and environment at the heart of UK financial decision making”.

Director and Principal Investigator of CGFI and the Lombard Odier Associate Professor of Sustainable Finance at the University of Oxford, Dr Ben Caldecott said: “The Centre for Greening Finance and Investment will allow financial institutions to access scientifically robust climate and environmental data for any point on planet earth now and projected into the future, and for every major sector of the global economy. Doing so will create public goods and unlock innovation.

“The UK is perfectly placed to transform the availability of climate and environmental data in finance. We have world-leading capabilities in all the various areas that need to come together to solve the problem”.