In November last year the UK Prime Minster, Boris Johnson set out his ten-point plan for a "green industrial revolution". Johnson said his plan would create hundreds of thousands of jobs, "making strides towards net zero by 2050" with highlights including:

  • A ban on combustion engine sales by 2030, with grants for electric cars, and funding for charge points. The sale of some hybrid cars and vans will continue until 2035.
  • A previously announced pledge to quadruple offshore wind power by 2030, to 40GW, enough to power every UK home.
  • Moves to boost hydrogen production, with the promise of a town heated entirely by hydrogen by the end of the decade.
  • Investment of £525m towards new nuclear power, based on "the next generation of small and advanced reactors".
  • £1bn next year for funds to insulate homes and public buildings, using the existing green homes grant and public sector decarbonisation scheme.

However, the plan is not without its critics, Labour said it was "a pale imitation" of the green stimulus package needed and the "announcement doesn't remotely meet the scale of the jobs emergency or the climate emergency".

The Government of Ireland, in its Climate Action Plan, set out its own roadmap in 2019 to tackle climate change with plans including the reduction of Ireland's reliance on fossil fuels by phasing out coal and peat burning plants, with a reciprocal increase in renewable energy from 30% to 70% by 2030 and the delivery of 950,000 electric cars by 2030.

Whilst the plans in the UK and Ireland have been criticised, there are at least plans in place. Northern Ireland currently has no stated ambition, no new target, no policy and no formal support to drive further development. The Economy Minister, Diane Dodds has publicly stated that "the clean energy sector in Northern Ireland, and renewables in particular, continue to be one of our highest priority areas for addressing climate change and delivering green economic recovery". Her department has begun the process of developing a new energy strategy to decarbonise the Northern Ireland energy sector by 2050 but the new energy strategy for Northern Ireland will not be ready until the end of 2021 at the earliest.

Banks and Financial Institutions have responded to the challenge of climate change, through a focus on climate change and environmental issues in their governance and reporting. This has driven practical measures within their business to actively address climate change, for example in how supply chains are managed and in where new investment or lending is focused. This reporting of Climate-related Financial Disclosures is to become fully mandatory across the economy by 2025. The joint Government Regulator TCFD Taskforce has published its roadmap for implementing mandatory disclosures, many of which will come into force by 2023. The upcoming rules and regulations will capture a significant portion of the economy including listed commercial companies, UK-registered large private companies, banks, building societies, insurance companies, UK-authorised asset managers, life insurers, FCA-regulated pension schemes and occupational pension schemes.

This shift, coupled with the clear plan of the UK government set out in July 2019 in its Green Finance Strategy, ensures that the Banking and Finance Sector will play a key role in the 'greening' of the economy and the ambition to reach 'net-zero' by 2050. Over the next few months, as the economy emerges from lockdown, never before has behaving ethically and responsibly been so important to consumers' purchasing decisions. Green finance covers a wide range of financial products and services, which can be broadly divided into banking, investment, asset management, pension schemes and insurance products which are typically designed to encourage or reward environmentally friendly activity.

The UK government also wants to ensure that UK financial services capture the domestic and international commercial opportunities arising from the 'greening of finance', consolidate the UK's position as a global hub for green finance, position the UK at the forefront of green financial innovation and data & analytics, and build skills and capabilities on green finance. In November 2020, Rishi Sunak, Chancellor of the Exchequer, announced government plans to issue its first Sovereign Green Bond. These bonds will be issued in 2021, subject to market conditions and help finance projects that will tackle climate change, finance infrastructure investment and create 'green' jobs across the country.

It is clear that Banks are looking to help their customers thrive in the low-carbon transition and build a more sustainable future for themselves, their businesses and ultimately the planet. The key is working with customers, particularly in the most heavily emitting sectors, as they move towards lower carbon emissions; providing tailored solutions and products to progressively decarbonise, whilst helping to ensure a just and stable transition to maintain economic stability.

It will also require a change in approach within banking and finance, ensuring current and future financial risks and opportunities from climate and environmental factors are integrated into mainstream financial decision making, to prioritise financing and investment that supports customers in all sectors to transition to lower carbon emissions, and to apply a climate lens to all financing decisions, taking into account the unique conditions for each customer.

Despite the moves in the banking and finance sector, without certainty in the direction of its policy, Northern Ireland risks being left behind. Its support mechanism for renewable energy, the Renewables Obligation Certificate (ROC) scheme, closed to new capacity in April 2017 and was not replaced by the contracts for difference scheme like the rest of the UK. The Republic of Ireland completed its first auction under its RESS Scheme in November last year. To ensure that Northern Ireland is not left behind, the NI Executive needs to provide clear instruction and guidance, direction, and incentives by way of a new Energy Strategy – with a realistic goal in mind to ensure that the future looks green for Northern Ireland.

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