London could be the green finance capital of the world

Liberal Democrat leader Sir Vince Cable has been writing about his green vision for finance, with London at the centre.

This is a welcome this initiative. The more we can green all aspects of our policy, the better. We have a good record from setting up the Green Investment Bank in coalition, and funding renewables. Vince begins,

The prospect of Brexit threatens to cause serious damage to the UK’s financial services industry.

Paris, Frankfurt, Dublin and even Luxembourg are circling like hungry jackals waiting to pick off the weakest members of the herd.

London will need to develop a distinctive and competitive offer to investors. I believe we can find it, in part, in the expanding world of green finance, steering investment into the low-carbon and resource-efficient technologies and infrastructure increasingly demanded by world markets.

He continues,

Britain already has real strengths in the green finance sector, with the achievements of the Green Investment Bank (before its needless privatisation), a track record in issuing green bonds and finance for renewable energy, and the City of London’s Green Finance Initiative.

Vince is calling for a comprehensive strategy for green finance with two key planks:

First, a programme of innovation, restructuring markets through enhanced flows of information.

I wholly endorse the conclusions of the Financial Stability Board’s Taskforce on Climate-related Financial Disclosures. Climate risk disclosure offers the opportunity to generate comparable and comprehensive information, enabling investors to make informed decisions and reducing systemic risks to financial systems….

We should also support the expansion of markets for green bonds and consider a range of incentives to encourage investors to hold green securities.

Second, we need to increase demand for green finance.

In September, Baroness Lynne Featherstone and I published a report demonstrating how the UK can meet the aim of zero net greenhouse gas emissions by 2050 – which, unlike the government’s current target, is consistent with the UK’s commitments under the Paris Agreement.

Such a policy framework would both increase the rate of deployment of green infrastructure, and provide investors with the confidence they need to commit to long term investments in green technology.

Excellent ideas, definitely the way forward.  Read the whole article here.

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  • I can’t help but observing, in a wry sort of way, that the centre left of our political life has spent years denouncing city bankers as the spawn of Satan and worse than genocidal war criminals yet as soon as they look to be moving to Frankfurt and Paris they have become national treasures to be kept at all costs.

  • John Barrett 16th Nov '17 - 11:43am

    Was the Green Investment Bank not sold to an Australian bank not that long after it got up and running and started to invest in exactly the right kind of projects?

    It wasn’t the prospect of Brexit that prompted this sell off…..and to a bank from outside the EU, so being in or out of the EU made no difference to keeping control of this bank in the UK. It was government policy which decided this.

    We already had the right vehicle to develop Green Energy projects, it is a pity that it appears to be another business that could be lost in the long run – if its corporate masters decide to move it elsewhere in the future.

  • Even the Lib Dems who have got to Westminster “go native”. Why not make St Davids, Carlisle, Penzance , Bangor, Berwick on Tweed, or Oban the “Centre of the (connected) Green Banking World”. Why not create jobs where their is space for houses (in some cases actual houses). Why is it “green” to create jobs in over crowded cities that involve long distance commuting? Surely there must be some green benefits from broadband, as it is now, it has simply caused a consumer boom, mainly of shoddy plastic goods, that end up polluting the oceans, and white vans careering round the countryside to deliver envelopes (of over priced tat, or “designer goods” produced by near slaves in foreign sweat shops) “the next day”.
    As Liberals, we should be advocating sensitivity to the environment, but it needs more thought than making London a banking centre all over again. (Though I do have some sympathy for those who will find themselves out of work after Brexit, and may feel pretty helpless as they struggle to survive in once fashionable city streets that after Brexit may have grass growing down the middle.)

  • Assuming Brexit goes ahead, we will need to search for niche markets in which we can become global leaders. Green energy is one of them. By applying market mechanisms we can create a combined funding and manufacturing base that supplies a one stop shop for businesses and countries wanting to enhance their environmental credentials.

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