The City minister has reaffirmed the government’s ambition for a green transition across the financial services sector, despite the industry pivoting on climate priorities.
Speaking at City Week on Monday, Emma Reynolds said: “The UK has a world leading financial and related professional services ecosystem and the research that is needed to integrate sustainable finance.”
Reynolds said the Treasury’s upcoming Financial Services Growth and Competitiveness Strategy – a key pillar in the government’s economic agenda – will help foster the UK’s push to “transition finance” through honing in on skills as one of five key areas.
But this comes amid a widespread retreat from the financial services sector.
The banking industry has been at the forefront of a green row back, with Barclays and Natwest dropping climate targets from their annual bonus schemes for senior executives. Meanwhile, Europe’s biggest lender HSBC slapped a 20-year delay on its net zero target.
Energy secretary Ed Miliband has touted plans to “transform” the UK’s financial services sector “into a global hub for green investment”.
Whilst London is a leader in the area, City AM reported earlier this year green finance ratings across financial sectors were dramatically reducing.
Despite topping the 15th edition of Z/Yen Global Green Finance Index, London’s rating reduced 36 points to 598.
Green transition moving ‘slower’ than hoped
The Treasury has said the financial services growth strategy, set to be published on July 15, will “shape the type of growth being pursued, and support net zero, regional growth, and economic security and resilience”.
Reynolds, who is steering the Treasury’s plans, said the upcoming COP30 in Brazil will be crucial to green ambitions following last years agreement where governments pledged to scale up climate finance into developing countries to $1.3 trillion per year by 2035.
“We think that in order to make this a success, the road map must ensure that it’s based on several principles. It must be inclusive, it must have stability, and it must have focus,” the City minister added.
But top names across the sector have vocalised concerns efforts in green finance have stalled.
Sandra Boss, the UK Chair at Blackrock, said during a at City Week panel whilst “the need” for investing in renewable energy was “undeniable,” the energy transition was progressing “slower than hoped”.
The waning commitment to green finance is being witnessed on a global scale and many have pointed to President Donald Trump’s return to the White House as a key catalyst.
One of Trump’s first executive orders following his inauguration in both 2017 and 2025 was to withdraw the US from the Paris Climate Agreement. The document encourages global co-operation to limit the causes of global warming.
The World Bank – an international development organisation owned by 187 countries – softened its climate approach after the US took a chainsaw to climate programs.
By CityAM
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