Companies will be at the forefront of innovation and investments in decarbonisation. At COP26 in Glasgow, CBI brought together business leaders to show how sustainable finance can fuel exciting and vital projects in the real economy.
- Rain Newton-Smith, Chief Economist, CBI
- John Godfrey, Director of Corporate Affairs, Legal and General Group
- Judith Cruickshank, Regional Managing Director, NatWest
- Dr Ifeyinwa Kanu, IntelliDigest
- Richard Thompson, Partner, Foresight Group
- Linus Hagg, CFO, Arise – Skaftåsen Wind Farm
Moderator: Roger Harrabin, BBC
Opening message from Economic Secretary to the Treasury John Glen MP.
Money for decarbonization is available
Funding is going to be crucial to get the results of COP26 on the ground. Loudspeakers the financial services sector has shown that the money for decarbonization is available – the key is to make sure it is used the right way.
Legal & General aims to bring about change by investing in mand zero homes and contribute to the decarbonization of the housing stock in the United Kingdom. NatWest sees huge potential for SMEs to take climate action and help them reduce costs, access new markets and make them more attractive to consumers through new investments. This jobs with companies such as IntelliDigest, which develops sustainable solutions in the field of biotechnology and food. Richard Thompson pointed out that private equity also has an important role to play in the pursuit of decarbonization. Focus Foresight groupes his investments in different areas, such as decarbonisation of power systems, transport, food production and manufacturing, as well as nature-based solutions. His support is crucial for developers of projects on the ground, such as the Skaftåsen wind farm.
Support for investors goes beyond financing
The financial sector can provide money for decarbonization, but the support goes beyond finance. Dr Ife Kanu, CEO and founder of IntelliDigest, received help from the Royal Bank of Scotland to successfully transition from an academic position to an entrepreneurial position. She participated in RBS’s Climate Accelerator program, which allowed her to think more deeply about her business purpose, how she runs it and its impact. is on the society. NatWest also helped her close IntelliDigest’s crowdfunding cycle. his The Back Her Business program, which aims to reduce the gender gap in entrepreneurship.
Linus Hagg of Arise said there was a lot of capital available. The key to success, however, is finding knowledgeable investors, such as Foresight Group, who understand the technical aspects of the industry and know how to structure the investment effectively.
The role of government is to create the right policy frameworks
Economic Secretary to the Treasury John Glen MP said in his opening remarks that collaboration between business, financial institutions and government is crucial if we are to make immediate progress towards greening the economy. Rain Newton-Smith agrees. Trillions of dollars are needed to close the net zero funding gap, she said, and only companies – in collaboration with the government – can provide the scope of innovation and investment needed to achieve net zero goals.
The CBI describes how to finance the transition in the recent guidance document on sustainable finance. Rain stressed that to spur sustainable financial investments, companies need the right economic projects to support – from wind power to hydrogen. They will also need effective regulation. The CBI was pleased to see that the government’s recent roadmap for greening finances emphasizes results in the real economy. As we move forward, we must ensure that global sustainability reporting standards are developed with consistent data and metrics. The announcement at COP26 of the creation by the IFRS Foundation of an International Sustainability Standards Board is a step in the right direction.
We must ensure an orderly and fair transition that takes into account social benefits
Some sectors are more difficult to decarbon than others, and we cannot move away from them, said Legal & Generalby John Godfrey. During the transition process, the financial services industry must allow these hard-to-control sectors to change in an orderly fashion.
Decarbonization can and must go hand in hand with social benefits, as underlined by the CBI’s position paper on sustainable finance. One of L & G’s business lines, which focuses on generating 50,000 households across the UK, shows how this can be done in practice. All homes will be net zero from 2030 with an EPC A rating standard. Solutions are good – not only for the planet – but also for the people. L&G has invested in heat pumps and new types of modular construction, which will make homes inexpensive for the people who live there to operate. Additionally, one of L & G’s goals is to create the UK’s first carbon neutral retirement community in the UK. The project is not only positive for the environment, but also smart from a public health perspective, as research shows these retirement communities tend to have fewer GP visits than others. Finally, investing in net zero buildings and precision houses could lead to regional growth and be an important industrial hub for the north of England, argued John Godfrey.
For more inspiring case studies of sustainable finance in action, see our article: https://www.cbi.org.uk/articles/sustainable-finance-in-action/