The Institutional Investors Group on Climate Change (IIGCC) has today urged the next UK government to unlock investment for a greener economy in a report containing key recommendations.

The IIGCC warns that the UK risks falling behind not only in delivering its legally-binding net zero targets, but also losing its status as a climate leader in an increasingly competitive global race to attract capital.

Furthermore, it adds that investors are looking for a supportive policy environment that provides both confidence and certainty required to make long-term investments in the UK’s transition to net zero.

Emily Murrell, policy director at the IIGCC, said: “The building blocks of a sustainable finance framework are beginning to fall into place, but there is an urgent need to move ahead with swift implementation of key pieces of legislation.

“This is an opportunity to shift gears, and pivot permanently towards decarbonisation, channelling efforts into the effective delivery and implementation of policies which support this.”

Policy recommendations

Developed in collaboration with IIGCC investor members, the Call to action for UK government 2024 report, which has been published by the group ahead of the next election, contains 10 policy asks categorised under five key areas:

  • develop a whole-of-government approach with a centralised strategy to facilitate delivery of net zero targets;
  • devise a comprehensive green industrial strategy that supports the decarbonisation of the UK economy and boosts economic competitiveness;
  • increase the UK’s adaptation and resilience to growing climate impacts;
  • embed the delivery of a nature-positive transition into the UK policy framework;
  • implement a supportive financial regulatory environment which facilitates capital flows towards climate and nature goals.

The IIGCC’s call for action comes just a week after the UK Sustainable Investment and Finance Association (UKSIF) said it felt the UK’s leadership in sustainable finance is under threat and published a report on how to prevent it falling further behind, stressing that the sector is at a key inflection point.

The UKSIF report found that more favourable policies could see up to £100bn (€116.5bn) of assets under management (AUM) shifting towards sustainable finance in the UK.

Barriers and solutions

Among some of the current barriers faced by the UK in achieving net zero according to the group is the government’s decentralised approach, which, it added, is marked by “inconsistency, changes and delays”.

One of the IIGCC’s proposed short to medium recommendations includes establishing a permanent home for the Green Technical Advisory Group (GTAG) as an advisory board to the government to ensure ongoing, high-quality advice on the development and implementation of the Green Taxonomy.

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