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UK creates £10m centre to provide green advice to financiers

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A national green finance research centre is being set up by the UK government to provide advice to lenders, investors and insurers on how to make environmentally sustainable decisions.

UK Research and Innovation (UKRI) is pouring £10m into the project which aims to help financial institutions shift money away from risky activities that harm the environment, such as coal-fired power and deforestation, and towards activities that are less harmful, such as renewable power and sustainable agriculture.

Dubbed the UK Centre for Greening Finance and Investment (CGFI), the initiative will be led by experts from the University of Oxford.

New physical hubs in Leeds and London will be created to help companies and start-ups commercialise products designed to make global finance more environmentally friendly, including tools that measure storm and flood risk facing properties or the pollution created by companies and the liabilities that result.

Other institutions will form part of the new national centre, including the Universities of Bristol, Leeds, Reading, and Imperial College, as well as The Alan Turing Institute and the Satellite Applications Catapult, and the Science and Technology Facilities Council.

Work will begin in April, ahead of this year’s COP26 UN climate summit in Glasgow.

Energy minister Anne-Marie Trevelyan said: “Climate change is the biggest issue that we need to tackle to protect our planet for our children and grandchildren.

“While the government has invested billions of pounds so we can end the UK’s contribution to climate change, we will not reach our net zero target without mobilising private capital and unleashing the power of the free market.

“The UK Centre for Greening Finance and Investment in London and Leeds will encourage financial services to turn the tide of their investments and focus on sectors and companies that have a smaller environmental footprint.

“Doing so will support industries and businesses to develop clean green innovations, creating thousands of jobs across the country - ensuring we build back greener.”

The Bank of England’s executive sponsor for work on climate change, Sarah Breedan, said: “integrating climate and environmental data and analytics into decision making will allow financial institutions to identify, measure and manage the financial risks and opportunities from climate change, and so support the Bank’s objective to ensure the financial system is resilient to these risks and supportive of the transition to net zero.”

Last month, researchers found that carbon pricing schemes have not been as effective a driver at tackling climate issues and carbon emissions as previously thought.

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