Growing green finance

TheCityUK and Imperial College Business School are undertaking joint research to understand the key enablers for growing the UK green finance market.

To many finance practitioners, the phrase ‘green finance’ bears strong resemblance to the talk about ‘emerging markets’ 20 years ago: they are terms that everyone seems to be discussing, but few know exactly what they mean. As fields of investment, they have a sense of newness and urgency, despite being fairly well-established. And there is the inevitable fear that they may just be a passing fad…

But just as emerging markets entered the mainstream of investing over the past two decades, we believe green finance is destined to become a core element of global capital markets. It is already exciting interest among market participants and policymakers.

It’s now time for the entire financial services industry to understand what exactly green finance encompasses and why it is growing in importance to the sector. As detailed in this report, green finance is not charity and it’s not about hand-outs or subsidies. Rather, it uses the age-old premise of risk and return in the private sector to solve some of the world’s most pressing challenges.

This report, the first output of an ongoing collaboration between our institutions, offers a practical definition of green finance and describes its major markets. Our research explores the UK’s pioneering role in green finance and the opportunity that the UK has to remain a leader in this area. We hope our partnership serves to help make green finance increasingly mainstream in the years ahead.