UK invests £10m in new green finance research centre

The UK is investing £10m in a new national green finance research centre, the UK Centre for Greening Finance and Investment (CGFI), which will be funded by UK Research and Innovation (UKRI) and led by the University of Oxford.

As reported by our sister title, European Pensions, the centre hopes to provide those in the financial sector with better information to make decisions that contribute to a more sustainable planet.

Those behind the creation of the centre believe that, currently, access to scientifically robust data and analytics is currently patchy and unreliable.

University of Leeds Professor (pro-dean, international), Iain Clacher, will be leading on the pensions and asset management work for the centre.

"Asset owners are key investment decision-makers as part of the transition to net zero. Mobilising the trillions of investments held in pension funds will be key in achieving net zero. Working with pension funds, investment consultants, and asset managers, the centre will help to accelerate the adoption of TCFD, and the application of other climate and environmental risk analytics into the investment decisions of pension funds," Clacher said.

One of the centre's aims is to help financial institutions shift money away from risky activities that harm the environment, such as coal-fired power and deforestation, towards activities that are less harmful, such as renewable power and sustainable agriculture.

New physical hubs in Leeds and London will support companies and start-ups commercialise products that can green global finance, including tools that measure storm and flood risk facing properties or the pollution created by companies and the liabilities that result.

The centre will work with finance professions, such as the Chartered Bankers Institute and Chartered Financial Analysts UK, to ensure that every professional financial decision takes climate change into account.

Other institutions will form part of the new national centre, including the Universities of Bristol, Leeds, Reading, and Imperial College, as well as The Alan Turing Institute and the Satellite Applications Catapult, and the Science and Technology Facilities Council. In the summer a full range of financial institution and corporate partnerships will be announced.

Work will begin in April, ahead of this year’s COP26 UN climate summit in Glasgow. The CGFI will deliver on commitments made in the UK Government’s 2019 Green Finance Strategy, and the announcement signals the UK’s commitment to using its global finance sector to support the transition to a net zero carbon and nature positive future.

Commenting on the announcement, UK Economic Secretary to the Treasury and City Minister, John Glen, said: “We’ve set the ambition for net zero – now we must ensure our financial sector has the tools and information to get behind the transition. We’re already improving the climate data available by mandating TCFD-aligned disclosures across the economy and implementing a green taxonomy.

“This new centre will advance the UK’s leadership in green finance and bring forward the day when firms can access environmental data and analytics for every place on Earth, past, present and future.”

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