In his first speech to City financiers, Chancellor of the Exchequer Rishi Sunak outlined his plans to transform the UK’s financial services industry through £15bn of green bonds, known as a green gilt, that will support projects that decarbonise key parts of the UK economy while improving climate resiliency and adaptation.
The £15bn would be invested into projects like zero-emissions buses, offshore wind, and schemes to decarbonise homes and buildings will also be eligible for funding.
The green savings bonds will be available through National Savings & Investments (NS&I), offering consumers an opportunity to support green projects while receiving a fixed rate on their savings over a three-year term. The state-owned savings bank will launch the bonds later this year, with a minimum investment of £100 and a maximum limit of £100,000 per person.
Sunak also stated his plans to require companies, pension schemes, financial services firms, and their investment products to report on the impact they are having on the climate and environment. They will also have to report the risks and opportunities facing their business.
These new integrated Sustainability Disclosure Requirements he says will ‘bring together and streamline existing climate reporting requirements and go further to ensure consumers and investors have the information they need to make informed investment decisions and drive positive environmental impact’.
The government intends to legislate and deliver this as soon as they can and will set out its approach to green finance regulation ahead of COP26 in Glasgow this November.
It was also announced that the government will work with the Financial Conduct Authority (FCA) to create a new sustainable investment label, a quality stamp that businesses can use to clearly inform consumers of the environmental impacts and sustainability of their investments.
Sunak says that these two products will give both investors and savers across the UK the opportunity to ‘join the collective fight against climate change and other environmental challenges, reinforce the UK’s position as a world-leader in green finance, and create new jobs in green technologies across the country’.
To conclude his speech the Chancellor said: ‘As the baton passes to a new generation of leaders in finance, I feel optimistic about the future. Ambitious at home. Confident internationally. With a plan to make this country the world’s most advanced and exciting financial services hub for decades to come, creating prosperity at home and projecting our values abroad.’