Roadmap for recovery – the role of Sustainability

Blog
12 May 2021

In the first of our 'Roadmap for Recovery' blog series, Emma Reynolds explores how tackling climate change and a post-pandemic economic recovery can go hand in hand.

Sustainability was rapidly rising up the priority agenda for governments and private sector companies well before the outbreak of Covid-19. But the pandemic has highlighted the importance of preparedness and mitigation strategies for long-term issues such as climate change. This year’s British Presidency of COP26 has further enhanced that momentum.

Sustainable finance has now emerged as a far wider industry than its narrow beginnings, which were dominated by green finance transactions. As such, ESG (environmental, social and governance) concerns are now an important part of finance discussions and the relationships between corporates and their financers.

Financial and related professional services have a crucial role to play in this agenda. Through products like green bonds and green loans, the financial services sector can drive capital towards sustainable products. Asset managers are increasingly offering ESG-aligned portfolios, and legal and advisory firms are helping their clients recognise their obligations and reorganise their operations to meet tougher environmental standards. The industry is also doing more to address its own sustainability credentials – increasingly making ambitious ESG and net-zero commitments.

Nevertheless, important challenges remain. The lack of commonly agreed definitions and classification systems, poorly aligned incentive structures, and disagreement on the right targets and goals are just a few examples.

Our report offers recommendations on how these challenges may be overcome, stressing the need for a transparent and open partnership between the industry, government and regulators. The UK must make sure it is able to ride the wave and take a world leading position in finance’s greener future.

Emma Reynolds photo
Emma Reynolds Managing Director, Public Affairs, Policy & Economic Research

Emma Reynolds is the Managing Director of Public Affairs, Policy and Research and has held this position since June 2020. Prior to joining TheCityUK, Emma was the Member of Parliament for Wolverhampton North East from 2010 until 2019. During that time, she held various shadow ministerial positions including Shadow Secretary of State for Communities and Local Government, Shadow Housing Minister and Shadow Europe Minister. Emma was also a member of the House of Commons Health and Exiting the EU Select Committees.