“There is precedent for this, with the German government’s Energiewende initiative helping private capital investments in green energy technologies grow by 35% in 2019-2020. Increased investment in the UK has similarly attracted global investors seeking stable opportunities in clean energy, shifting capital flows towards renewable projects worldwide – particularly in emerging markets.”

Moreover, the influx of investment into the UK’s green sector is attracting global investors seeking stable opportunities in clean energy. This shift in capital flows towards renewable projects is particularly significant for emerging markets, where sustainable energy infrastructure is crucial for economic development and climate resilience.

The role of financial institutions

Alongside governments, financial institutions are playing a pivotal role in this green transition.

A report by the City of London Corporation and Climate Policy Initiative revealed that tracked UK financial institutions have nearly tripled their investments in clean energy projects in just one year, reaching US$2.3bn in 2023. This represents the fastest rate of increase across all global financial centres studied.

Verdantix also highlights the improvements in transparency underpinning financial institutions’ net zero targets. By 2023, half of the tracked UK institutions disclosing their net zero target portfolio coverage had set targets covering more than 70% of their invested assets.

“Too many governments and companies still think that climate risk is a problem for the 2030s or beyond,” believes David Metcalfe, CEO and Co-founder of Verdantix.