The House of Commons Environmental Audit Committee has launched a Green Finance inquiry to scrutinise the Government’s strategy to develop ‘world leading Green Finance capabilities’.

The inquiry will examine:

• the measures set out in the Clean Growth Strategy;
• whether the Green Investment Group, formerly the Green Investment Bank, is fulfilling commitments made by its new owners Macquarie;
• the UK’s future relationship with the European Investment Bank;
• how company reporting on climate liabilities and risks could be encouraged;
• whether the Government’s policies are likely to deliver the levels of investment needed to meet the UK’s national and international environmental commitments

The Government’s Clean Growth Strategy sets out how more than £2.5 billion will be invested by the Government to support low carbon energy innovation from 2015-2021. The strategy says it will accelerate clean growth by developing world leading Green Finance capabilities.

Measures contained in the strategy include promises to set up a Green Finance Taskforce with senior representatives from the finance industry and Government to develop ambitious policy proposals which could further accelerate private sector investments to deliver the Clean Growth Strategy.

Launching the new inquiry, Environmental Audit Committee Chair, Mary Creagh MP, said:

“The UK needs billions of pounds of public and private investment to decarbonise the economy and upgrade our transport, energy and industrial infrastructure.

"The Government says it wants to be a global leader in green finance. We will scrutinise its plans in the Clean Growth Strategy, look at the Bank of England’s proposals on disclosure of climate-related financial risk, and examine what will happen to UK climate investment if we leave the European Investment Bank."

The Committee is inviting written submissions on some or all of the following points:

• How can the structure of incentives across the investment chain be changed to promote long-term sustainable development?
• Is the Government’s level of ambition on green finance - and the mechanisms it sets out in the Clean Growth Strategy – sufficient to generate the investment needed for the UK to meet its environmental commitments?
• How will the Clean Growth Strategy feed into the work underway by the World Benchmarking Alliance on how an SDG index could be established?
• Is the Green Investment Group (GIG) fulfilling commitments made by Macquarie to ensure the Bank ‘remain[s] one of the leading investors in green infrastructure in the UK and Europe’?
• How will leaving the EU affect the UK’s ability to leverage investment into low-carbon and environmentally friendly projects in the UK?
• What options are there for the UK’s future relationship with the European Investment Bank? What would be the implications for green investment in the UK?
• Given the work being carried out by the EU’s High Level Expert Group on Sustainable Finance, where should the UK’s newly created Green Finance Taskforce concentrate its efforts?
• How effective are the Task Force on Climate-related Financial Disclosures’ (TCFD) recommendations likely to be at moving investment into ‘clean’ sectors?
• The Government has said it will ‘encourage’ publicly-listed companies to adopt the TFCD’s recommendations on climate risk disclosure. How could it do this? Is a voluntary approach sufficient?

Is Macquarie Group fulfilling commitments made at Green Investment Bank privatisation?

The inquiry will also examine whether the Green Investment Group is fulfilling commitments made by its new owners, the Australian Macquarie Group Ltd, regarding its green purposes. The Government completed the Green Investment Bank privatisation on 18 August 2017 with the sale to Macquarie.

Macquarie has committed to the GIB’s target of leading £3 billion of investment in green energy projects over next 3 years. It also announced that the Bank will now operate under the name Green Investment Group in order to overcome the legal and regulatory barriers to using the term ‘Bank’ in some international markets. It says it will pursue a vision ‘to invest in green infrastructure internationally and positively contribute to the globalisation of the renewables industry’.

The inquiry will also look at the UK’s future relationship with the European Investment Bank (EIB), the EU development bank owned by the Member States. Over the past five years (2012-2016) the EIB has invested over EUR 31.3 billion in the British economy, including more than GBP 13.4 billion in ‘climate projects’.The future of that funding may be in question after the UK leaving the European Union.

Deadline for written submissions of evidence is 3rd January 2018 – click here to access the submission form