UK financial institutes triple annual clean energy investment

A report released by the City of London Corporation and Climate Policy Initiative (CPI) has found that UK financial institutions have tripled investment into clean-energy projects to US$2.3 billion (£1.8 billion) across 2023.

The report, From the Commitment to Action, revealed that the rate of investment in clean energy projects by 126 tracked UK financial institutions was the fastest across all global financial centers in the study.

In 2023, the five financial centers (France, Germany, Japan, the UK, and the US) experienced an average 59% increase in clean energy project investments compared to 2022. This is a welcome increase, as the IEA has previously said worldwide investment needs to rise to around $4 trillion by 2030.

Thus, the report reveals that key global financial centers have significantly improved across several dimensions.

The study found that nearly all financial services firms being tracked have established formal climate commitments. The focus is now on implementing these commitments and ensuring they effectively finance the transition to net zero.

“We should celebrate the progress financial services institutions made across major global financial centers 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,” said policy chairman at the City of London Corporation, Chris Hayward.

“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.”

Ana Nacvalovaite, a research fellow and ESG expert at the University of Oxford, explored finance and investment in the energy transition in a recent blog post exclusive to Current±.

In the article, Nacvalovaite stated that the global economy is “shifting, and the role of sovereign wealth funds (SWFs) in fostering sustainable development has become increasingly significant”.

These state-owned investment funds, traditionally known for their conservative investment strategies, are now seen as “pivotal players in the global transition towards renewable energy”.