Financial institutions managing £1.5trn in assets have warned the government that a lack of clarity on green policies risks halting investments.
This warning comes in a letter sent to prime minister Rishi Sunak, signed by 36 financial institutions that are members of the UK Sustainable Investment and Finance Association (UKSIF).
Companies that are signatories of the letter include Aegon, Royal London, CCLA, Jupiter Asset Management and Scottish Widows.
The government’s recent rhetoric and lack of clarity refer to recent debates that have cast doubt on the UK’s 2030 phase-out of new petrol and diesel cars and 2035 phase-out of gas boilers.
As well as plans to issue new oil and gas licences in the North Sea which “all cast uncertainty on government’s commitment to the UK’s near and longer-term climate targets”.
UKSIF said both investors and institutions need confidence in the government’s long-term commitment to the net-zero target agenda.
This is to ensure “multi-billion-pound investments in the UK’s sustainable economy of the future”.
The membership organisation has concerns “that recent events and signals risk eroding this trust, potentially delaying net zero-related investment”.
The finance sector is urging the government to provide long-term policy certainty to ensure the UK is a world leader in sustainable finance.
UKSIF added: “When the government looks committed on climate change, investors follow and can channel private capital into new technologies and projects that will decarbonise the country.”
UKSIF chief executive James Alexander said: “The global competition to capture billions of pounds of private investment in the clean industries of the future is intense. Ministers’ recent remarks are undermining investor confidence and putting the UK’s net zero head start at risk.
“The major financial players are deciding where to invest, and the UK needs to look both attractive and consistent as a leading destination for sustainable investment.”
BT Pension Scheme chair Otto Thoresen said: “We call on the UK government to uphold its net zero ambition and take meaningful action over the coming years to demonstrate its commitment. Long-term and consistent policy will help drive real investment into the UK economy.
“Holding sustainability considerations at the core of this will lead to a more prosperous economy, increased growth and job creation which in turn will help secure our members’ pensions.”
