Labour to champion green covered bonds in investment strategy, says Siddiq
Green covered bonds are set to be a key plank of Labour’s investment strategy for clean energy, Tulip Siddiq is set to tell the Square Mile today.
The shadow City minister is expected to outline Labour’s strategy for the clean energy industry and how the party aims to unlock billions in investment at TheCityUK conference in London today.
“Without putting any costs on taxpayers, sensible reform could empower financial services to invest billions in the infrastructure we need to get to net zero, while creating good jobs in industries ranging from wind to hydrogen,” she said.
The party will pledge to deliver Solvency II reform to unlock insurance capital; a green prosperity plan to boost financial services investment; and clarity on sustainability disclosure.
So-called green covered bonds could boost investment in wind farms, hydrogen and other infrastructure, she will say, as Labour continues its City charm offensive.
Banks and insurers already raise close to £200bn in bonds annually in the UK, with FCA regulated loans allowing cheaper lending and favourable capital treatment.
Siddiq is expected to urge investors to aim for five per cent of this going towards green infrastructure in the hope of generating £10bn a year for wind and hydrogen projects.
‘Productive investment’
Labour leader Sir Keir Starmer has pledged a Labour government would make Britain a clean energy superpower by 2030 and secure the highest sustained growth in the G7 .
Phoenix Group investment chief Mike Eakins welcomed Labour’s ambitions, and said his firm wants to invest up to £40bn in “sustainable and productive assets to support economic growth, levelling-up and the climate change agenda”.
He said the move was “an important step in opening up investment access to green assets, including green covered bonds, that will put Britain’s private capital to more productive use”.
“[It] recognises the power of private capital in driving productive investment, and this should just be one part of achieving a necessary broader package of capital market reforms to put Britain’s £4.6 trillion of pension and insurance assets to better use for policyholders, UK businesses and the real economy,” he added.
TheCityUK CEO Miles Celic said: “Industry is very supportive of harnessing innovative thinking to unlock more investment into green projects that support the UK’s net-zero transition.
“We are committed to working on a cross-party basis to develop solutions that will see more green capital channelled into the economy, creating growth, jobs and prosperity across the country.”