A report from the City of London Corporation and Climate Policy Initiative (CPI) has revealed that financial institutions (FIs) in the country have nearly tripled their investments into clean-energy projects in the span of just a year.

In 2023, 236 UK FIs pumped US$2.3 billion in these green energy projects, with the rate increase recorded as the fastest across all global financial centres. Internationally, the five financial centres covered in the report – UK, US, France, Germany, and Japan – saw a 59% uptick in clean energy level project investments compared to 2022.

The report also analysed the progress being made among a subset of members of the Glasgow Financial Alliance for Net Zero (GFANZ), revealing that significant strides have been made by FIs across several dimensions.

As per the study, almost all tracked FIs now have formal climate commitments in place, with attention shifting to implementing these plans and ensuring that they are positively impacting the net zero transition.

Findings from the report also revealed that transparency surrounding net zero targets is improving, with half of the tracked UK FIs disclosing their portfolio coverage by 2023. All these institutions also set a target covering more than 70% of their invested assets.

Meanwhile, half of FIs tracked in France had set targets covering 60%, while half of those in US and Japan had targets with 50%.

“It is estimated that $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,” Lord Mayor of the City of London Micheal Mainelli said.

“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 organisations 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,” Mainelli said.

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