Change the rules of green finance
A letter to the government calling for an ambitious green finance strategy to tackle the cost of living crisis
05 July 2022
In anticipation of the new government Green Finance Strategy, the New Economics Foundation and partners have set out five principles for a new vision of green finance that will help tackle the cost-of-living crisis, improve the UK’s energy security, and accelerate the net zero transition.
In a joint letter signed by 75 NGO and academic leaders representing a wide range of policy, research, and campaign organisations, we call on the government to follow these principles to shift financial flows to deliver a fair net zero transition:
- A clear plan for aligning financial flows with a 1.5C pathway and nature protection goals, with independent mapping of progress and investment gaps across public and private finance.
- Actively shifting financial flows, by reflecting the high risk of fossil fuel lending in regulation, and measures to keep the cost of green lending low in the current high-inflation, higher-interest-rate environment.
- A key role for public investment in driving a fair transition, as well as strategic public finance to create scale up private investment, for instance through the UK Infrastructure Bank.
- A strong regulatory framework for enforcing the private sector transition to net zero, based on a UK taxonomy that rejects classifying gas or biomass as ‘green’, and with a new statutory objective for regulators to align the finance sector with net zero.
- Leading internationally and fulfilling global commitments, for instance by scaling up grant-based support to low-income countries, and ending UK financing of new fossil fuel infrastructure abroad.
