Led by the Institutional Investors Group on Climate Change, the UN-supported Principles for Responsible Investment and UK Sustainable Investment and Finance Association (UKSIF), a further 32 investors and financial institutions have urged the government to change course on its “misguided” plans.
The group, representing more than £1.5trn in assets under management, wrote to the PM: “We are deeply concerned by your decision to backtrack on vital policy measures that support the UK’s transition to net zero.
“Diluting ambition at this critical juncture erodes the UK’s position as a global leader on climate, undermines our international competitiveness and increases the risk that we fail to capitalise on one of the greatest economic opportunities of the 21st century.”
The letter noted that an “enabling policy environment” is a “prerequisite” for investors looking to make long-term investment decisions in line with their fiduciary duty to clients to “manage risk and opportunities”.
“The latest moving of the goalposts fundamentally undermines this.”
The group argued a “coherent, whole-of-government approach to the economic transition, underpinned by detailed policies” is a necessity if the nation is to meet its legally binding climate commitments.
To enable private finance to commit the additional £50-60bn of capital required each year to meet these commitments – a figure cited by the government in its 2023 green finance strategy – the group has asked the PM to maintain the ‘four Cs’ that “underpin effective policymaking”: certainty, consistency, clarity and continuity.
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While the group welcomed the updated plans to provide greater financial support under the boiler upgrade scheme and plans to speed up and enhance grid connectivity, it argued the decision to relax other targets will “erode market confidence”.
“Ultimately, delaying key targets and lowering the ambition of existing government policies would be misguided,” the group wrote. “It reduces the capacity of industry to plan ahead and make investments that will drive down the costs of adopting low-carbon technologies.
“Not only will the government’s current approach increase the UK’s cumulative emissions, but it will also end up costing the taxpayer more and hinder our ability to lead the charge in rolling out the climate solutions of the future.
“Staying the course on the UK’s long-term climate goals is fully compatible with addressing immediate issues, including cost-of-living concerns.
“We urge the government to uphold ambition and avoid backsliding on key climate policies, including by reconsidering the decision to delay phase outs of new ICE car sales and gas boilers, and maintaining commitments to deliver on energy efficiency targets.”
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The letter concluded with a warning that an “absence of strong policy incentives” would lead investment to flow to the regions and nations that are “taking a more consistent, long-term approach”.
Alongside IIGCC, PRI and UKSIF, the 32 investors and financial institution signatories are:
Aviva Investors
Border to Coast
Brunel Pension Partnership
Cardano
Castlefield Investment Partners
CCLA Investment Management
Church Commissioners for England
Church of England Pensions Board
ECO Advisors
Generation Investment Management
Greenbank
Gresham House
Impax
Jupiter Asset Management
Local Authority Pension Fund Forum
Local Pensions Partnership Investments
London Pensions Fund Authority
McInroy & Wood
Mirova
National Trust
NILGSOC
Ninety One
Nordea Asset Management
P1 Investment Management
Redwheel
Robeco
SAUL Trustee Company
Stafford Capital Partners
The People’s Pension
Troy Asset Management
Universities Superannuation Scheme
WHEB Group
