UKSIF Report: UK’s Leadership in Sustainable Finance at Risk

The UK’s Leadership in Sustainable Finance at Risk, Report Warns

The UK’s position as a leader in sustainable finance is under threat, according to a new report released by the UK Sustainable Investment and Finance Association (UKSIF). The report, titled “Financing the Future,” highlights the challenges facing the UK’s sustainable finance sector and calls for urgent action to prevent it from falling further behind.

The report identifies regulatory gaps in the financial services sector and warns that the UK risks losing up to £100 billion in assets under management (AUM) if more favorable policies are not implemented to support sustainable finance. Currently, the UK holds a significant share of the £23.8 trillion invested globally in sustainable assets, but this lead is in danger of slipping away due to a lack of policy support, according to UKSIF.

James Alexander, CEO of UKSIF, emphasized the importance of clear and stable policy frameworks to attract private capital and drive progress towards a net-zero economy. The report outlines key recommendations, including the need for a world-leading sustainability disclosure regime, clarifying fiduciary duties for pension schemes, and embedding biodiversity into the regulatory framework.

Industry consensus supports the need for stronger green policies, with research from the Green Finance Institute highlighting the economic risks posed by biodiversity loss and environmental damage. The report also reveals that a majority of business decision-makers in the finance sector believe that uncertainty over sustainability policies is limiting investment in the UK.

UKSIF’s findings show that there is a strong appetite for increased investment in sustainable projects in the UK, but this will require the implementation of favorable green policies. Greater harmonization of financial sustainability standards globally is also seen as a positive step for companies looking to invest in sustainable initiatives.

The report underscores the critical juncture at which the UK’s sustainable finance sector finds itself and calls for decisive action to secure its position as a global leader in green finance.