A coalition of 30 major asset managers, banks and investors, including Schroeder, BlackRock, Barclays, and Natwest, has urged the UK government to issue green bonds to support investments in projects designed to decarbonise the UK economy and tackle social inequality.
Reuters reported that the proposal involves the sovereign debt developed by the Green Finance Institute (GFI), the Impact Investing Institute (III), and the LSE’s Grantham Research Institute on the Environment, which is called “Green+ Gilt” by supporters.
Unlike other traditional green bonds, Green+ Gilt has the added benefit of addressing the issue of social inequality by targeting the widespread unemployment caused by the Covid-19 pandemic.
The developer claims it will help address regional inequality by 2050 and help to achieve the government’s goal of reaching net zero carbon emissions while also helping to reboot the UK economy.
The project’s developers said in a joint statement that “catalyze the development of the Sterling Green Bond market and provide a strong signal to international policymakers of the UK’s commitment to sustainable finance ahead of the president of the COP26 UN Climate Summit held in Glasgow next year.”
Professor Nicholas Stern – Professor of Economics and Government, and Chairman of the Grantham Institute, London Faculty of Economics and Political Science – Added.
“The UK needs a strong and sustainable recovery from Covid-19. Green+gold leaf is an important tool to help governments deploy and guide their savings into programs and projects, allowing them to be brought back to the environment where they need it most.
It can point to the direction of future opportunities and reduce the perceived risk. Now is the time to be ambitious. Green investments can have a rapid impact and drive strong and sustainable growth. ”
The issuance of green bonds has been increasing rapidly around the world in recent years. Approximately $200 billion has already been issued in 2020, with a cumulative total of $1 trillion since 2007.
Last month, the German government raised €6.5 billion from its first green bond, and the European Union reportedly is considering issuing more green bonds as part of its economic recovery programme in the wake of the coronavirus pandemic.
Cityuk’s CEO Miles Celic urged the government to catch up with its continental rivals.
“Acting on this proposal would demonstrate true UK leadership in green finance by selling green sovereign bonds with clear social impact characteristics.
There is a great desire for more sustainable financial investment opportunities. The UK must continue to develop its competitiveness in providing financial solutions to some of the most pressing social and environmental challenges facing today’s world. ”
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Junior journalist for a British investor magazine. It focuses primarily on finance and business content. I have a personal interest in Middle Eastern politics, human rights issues and sustainability initiatives.
