4 June 2024. A new report published today by the City of London Corporation and Climate Policy Initiative (CPI) has revealed that tracked UK financial institutions have almost tripled their investment into clean-energy projects in just one year, to USD 2.3 billion in 2023.

The report, the second From Commitment to Action, revealed that the rate of increase of investments into clean energy projects by 126 tracked UK financial institutions was the fastest across all global financial centers in the study. Together, the five financial centers covered (France, Germany, Japan, the UK, and the US) saw a 59% average increase in clean energy level project investments in 2023 compared to 2022.

The report is being launched by the Lord Mayor of London, Michael Mainelli, at the third annual Net Zero Delivery Summit (NZDS). The Net Zero Delivery Summit is hosted by the City of London Corporation in strategic partnership with the Sustainable Markets Initiative and will convene global financial and corporate leaders, as well as sustainability experts from around the world with a focus on turning commitments made at previous COPs into actions ahead of COP29 in Azerbaijan.

The report, which analyses progress amongst a subset of members of the Glasgow Financial Alliance for Net Zero (GFANZ) – a group of institutions that have committed to achieving net zero greenhouse gas emissions – revealed that significant improvements have been made by key global financial centers across several dimensions.  Almost all tracked financial services firms in the study now have formal climate commitments in place and attention is shifting to implementing these commitments and ensuring they are having the impact we need to finance the transition to net zero.

The findings also showed that transparency underpinning financial institutions’ net zero targets continues to improve. By 2023, half of the tracked UK institutions disclosing the level of portfolio coverage of their net zero targets had each set a target covering more than 70% of their invested assets. In comparison, half of institutions tracked in France had set targets covering 60% of their portfolios, while half the institutions in US and Japan had targets with 50% portfolio coverage. 

The findings of the report will form part of the discussions at the Net Zero Delivery Summit where the speakers include: Michael Mainelli, Lord Mayor of London, Chris Skidmore OBE, Chair Mission Zero Coalition; The Rt Hon Patricia Scotland KC, Secretary-General of the Commonwealth; Vanessa Havard-Williams, Chair of the Transition Finance Market Review, Chris Hayward, Policy Chairman of the City of London Corporation; Sabine Mauderer, Chair of the Network for Greening the Financial System; Jennifer Jordan-Saifi, CEO of Sustainable Markets Initiative.

Lord Mayor of the City of London, Michael Mainelli, said:

“It is estimated that USD 6 trillion will be required globally each year to reach net zero emissions by 2050.  Private finance has the critical role to play, over 85%, in financing green innovation, green infrastructure, and green growth. 

“With the UK’s strong track record as a global hub for sustainable finance, the City of London’s ambition for the third Net Zero Delivery Summit is to encourage innovation in sustainable finance. At the summit  financial services organizations globally will take stock of where they are on the pathway to net zero, and seek creative and collaborative responses to make sure we don’t fall short.”    

Policy Chairman at the City of London Corporation, Chris Hayward, said:

“We should celebrate the progress financial services institutions made across major global financial centers on the road to net zero. Organizations continue to see the opportunities a net zero economy can offer, across a number of areas of sustainable finance including transition and nature finance.   

“It is fantastic to see that UK financial firms continue to lead the way on the implementation of climate commitments. Over the last ten years, the UK’s financial services sector has played a critical role in supporting the transition to net zero globally.”

UK Director of Climate Policy Initiative, Dharshan Wignarajah, said:

“This latest analysis based on CPI’s Net Zero Finance Tracker highlights welcome progress by financial institutions. This is encouraging and reflects how good policy and leadership, like those exemplified by the United Kingdom, can produce real impact on the ground.

“But the research also reveals that significant gaps remain, especially considering many financial institutions in the UK and elsewhere remain outside the leading financial alliances for net zero and have not made any commitments. We hope that the attention brought to these issues by the UK and the City of London creates additional urgency and momentum on altering investment decisions towards tangible, positive impact in our economies.”