About
The APPG supports parliamentarians to understand more about sustainable finance.
It brings together policy makers, industry players, academics and practitioners to build political consensus for the changes required in the finance sector to help reach net zero.
The right financial policies can help develop markets, build a resilient economy and ensure finance can flow away from polluting fossil fuels, such as those invested in our pension funds, towards the job-creating, zero carbon sectors of the future.
Unlocking green
investment
The green revolution is happening fast, but we need it to go even faster. If necessity is the mother of invention, then the net zero carbon challenge is likely to bring about the greatest period of innovation the world has ever seen.
Whatever constituency you represent, there is enormous potential for transforming jobs and growing green investment in your community. But we need coordinated action to create a Just Transition that works for all.
Our Team
Sustainable Finance brings new opportunities where jobs are at risk
Research conducted by the LSE and Leeds University indicates that the following sectors have the largest percentage of jobs at risk or requiring upskilling in the transition to zero carbon. Sustainable investment that flows into businesses and projects across the UK can turn these risks into opportunities.
Transport and logistics
A third of jobs in transport and logistics are at risk, so investments happening now will dictate the shape and location of the industry for decades.
In Swindon, a diesel car plant is set to close with the loss of over 4000 local jobs. But innovation in hydrogen, batteries, and smart-grid connected cars could help to create a new niche for the UK automotive industry and secure investment for a new generation of jobs. Elsewhere, green transport infrastructure could be financed by Sovereign Green Bonds.
Construction and buildings
All new homes should be zero carbon, and every homeowner should be able to access good value finance to update existing homes. There are also huge opportunities for energy efficiency savings in the socially owned and rented sector. The Green Finance Institute has a coalition for Energy Efficiency of Buildings, which looks to innovate with finance products such as Green Mortgages, providing lower interest rates for energy efficient new homes and low-cost borrowing for energy efficient retrofitting. What’s more, investment in approaches for rented homes like Energiesprong will help tenants across the country.
Mining
There are 375,000 people currently dependent on jobs in oil and gas extraction. Most of these will not exist in a net zero carbon world. Retraining people so they can access new jobs in the green economy requires strong, long-term policy support and investment.
For example, in the Humber Region a wind energy revolution has created 2,000 high-value jobs in wind farm servicing and turbine manufacture.
Utilities
A quarter of utilities jobs are at risk, yet even more workers are enjoying new demand for their skills. An ambitious policy direction is vital for this heavily regulated sector. Many utility companies are recognising that their future is providing wider services, enabling zero carbon homes through products and services from solar panels to smart tariffs. EDF has already shown that this type of investment can grow revenue and customers and create jobs.
Policies can make
money move
The APPG will provide parliamentarians, industry and campaigners with information about what is needed to accelerate investment into greener businesses, and away from polluting businesses.
As Britain seeks a new role in the world, we could become a global hub for green innovation both in financial products and in the wider economy. That requires leadership and insight from decision-makers, so that we help steer hape the finance sector to meet the needs of decarbonising the economy.
Here are some examples of how we could boost green investment in the UK, create jobs and bring about a more resilient economy. We want to explore with you which will make maximum impact, and then collaborate to make them happen.
Out with the old...
Greening finance
As a world leading financial sector, UK banks play a huge role in financing global business. But our financial stability is
at risk from climate changebuilt upon rocky foundations. 15% of the world’s emissions are financed in London and 17% of the dividends paid out on the London Stock Exchange come from high carbon businesses. We need to change the rules of the game and disincentivise polluting investment.
Recognising climate risk at the Bank of England
Investment ratings agencies don’t consider climate change risks – but they should.
They often give companies like Shell the highest ratings as ‘safe’ assets, encouraging investments in these companies. But the impact of climate change risks should also be taken into account when assessing risk. Otherwise measures such as those used by the Bank of England to risk assess lending will continue to incentivise polluting investment.
Reporting on climate risk in business
The finance sector is waking up to the risks of climate change. This year sees the first ever regulator-led ‘climate stress test’ of a financial services sector.
It asks insurers to assess their own portfolios for climate risk – a positive move that will help build a climate resilient economy. Regulators must be ready and willing to act on the results if systemic risks are revealed.
Going further, the global Taskforce on Climate related Financial Disclosure (TCFD), led by Mark Carney, has made recommendations for how all companies and banks should identify and report on their climate risks. New government legislation is urgently required to roll this out across all sectors.
The Responsible
Investment Bill
The UK has shown global leadership by passing the Climate Change Act and enshrining Net Zero in law.
But we need new rules and regulations to ensure a smooth transition to Net Zero.
First, To achieve this, legislation should be introduced to put an obligation on fiduciary investors to align with the Paris Agreement and act as long-term stewards of capital. This would need to combine with other legislation to require clear reporting from both companies and investors on how their activities and investments meet this goal and clear penalties for not doing so.
We believe that this could pave the way to investors having legal obligations to be good environmental stewards more broadly for all their investments.
In with the new...
Financing green
Policy and regulation will be a key enablers of finance flowing into the green businesses of the future. The Green Finance Institute (GFI) in the City of London is working hard to ensure that a pipeline of green finance opportunities opens up here in London and across the world. This pipeline could reconfirm London as a global finance hub for the new green economy.
Green and transition bonds
Green bonds are used to raise money specifically for environmentally- friendly projects. They’re popular with investors because they’re future-proof.
However, the US$168bn of green bonds issued in 2018 is still a long way off tapping the estimated US$100tn pool of potential investment. Policy must lead in this area by introducing clearer definitions for green and transition bonds; introducing long- term strategy for stable investment returns; and recognising climate risk at the Bank of England.
Other countries have also launched Green Sovereign Bonds as a way to finance large green infrastrucutre projects.
Driving innovation with Policy
Investors know that climate change is one of the biggest business opportunities we’ve ever known. But accessing capital is still a struggle. National policy needs to support innovation by enabling investment to flow.
The APPG will enable parliamentarians to better understand how government can shape markets and enable communities to seize the opportunities offered in a Net Zero UK. For example, intervention to make the electricity market more flexible has lead to innovation in energy storage and smart devices which can save energy at times of low renewable energy supply. Electric- vehicle infrastructure needs policy changes to enable roll-out; energy efficient and smart homes requires better building standards; and Net Zero homes and communities need a government-backed planning regime
How will the APPG work with you?
The newly-established APPG on Sustainable Finance is the place to link
parliament with the finance industry.
The APPG provides opportunities for the finance sector and the energy industry to meet with parliamentarians to discuss the policy and regulatory framework needed to unlock sustainable finance. There will be up to four major events a year, and regular party and issue-specific briefings.
Who we are
The Parliamentary Officers of the APPG are:
Chair
Sir Edward Davey MP
Vice Chair
Gareth Davies MP
Rt Hon Ed Miliband MP
Alex Sobel MP
Officers
Simon Fell MP
Baroness Bryony Worthington
The APPG Secretariat is led by Polly Billington, Director of UK100 and is run in partnership with ShareAction, in association with the Green Finance Institute. We would like to thank Climate-KIC for their seed funding for the APPG.
The APPG Advisory Council Members are:
Alice Bordini Staden, MD GLC Advisors Ltd
Ben Caldecott, Director of Oxford’s Sustainable Finance Programme & Advisor to the Green Finance Institute
Katie Critchlow, MD Nature Metrics
Isabella Gornall, MD Seahorse Environmental Communications
Catherine Howarth, CEO, ShareAction
Andy Kerr, CEO, Climate KIC
Nick Robins, Professor in Practice – Sustainable Finance, London School of Economics Grantham Institute
Rhian-Mari Thomas, CEO Green Finance Institute
Baroness Bryony Worthington
How to get in Touch
If you’d like to be a supporter or member of the APPG we would love to hear from you:
Our Supporters
